Draftkings Inc (NASDAQ:DKNG) said it has delivered a letter to PointsBet Holdings' non-executive chairman and CEO proposing an indicative offer to buy the Australian company's US business for US$195 million in cash.
The sports gambling company said in a statement that its proposed offer represents a 30% premium to an existing US$150 million agreement to sell the business to Fanatics Betting and Gaming.
“While we continue to focus on operating more efficiently and driving substantial organic revenue growth in the United States, we will also look to prudently capitalize on compelling opportunities at attractive valuations, as is the case with PointsBet’s US business,” DraftKings CEO and co-founder Jason Robins said.
“We believe DraftKings is uniquely positioned to submit this superior proposal due to our scale and corresponding ability to generate meaningful synergies from the acquisition.”
If a deal was accepted, DraftKings said it would not impact its expectations of achieving positive adjusted underlying earnings (EBITDA) in 2024 and would increase its adjusted EBITDA potential in 2025 and beyond.
The company also outlined potential synergies between the two businesses, including offering its customers interesting new bet types and accelerating its roadmap of bringing more of its mobile sports betting technology in-house.
It said it would finance the acquisition from its balance sheet and does not need to raise any additional capital.
DraftKings’ shares traded 1.5% lower at $24.90 by 10:30am ET in New York.
ASX-listed PointsBet closed 0.4% higher at A$1.36.
Contact the author at stephen.gunnion@proactiveinvestors.com