Fanatics Present an Improved Offer for PointsBet Following DraftKings Withdraw
![Fanatics issues brand new bid for PointsBet](/assets/images/news/5286/fanatic-seal-deal-with-pointsbet-as-draftkings-withdraw-offer_980x428.jpg)
Fanatics Betting and Gaming (FBG) has made an improved offer to acquire PointsBet's US business, leading DraftKings to withdraw from the process.
The new proposal from FBG stands at $225 million and has been unanimously recommended by PointsBet's board. Initially, FBG had struck a deal in May to acquire PointsBet's US business for $150 million, but DraftKings subsequently submitted a higher proposal worth $195 million. PointsBet engaged in negotiations with both parties before confirming that the improved FBG offer was superior in terms of pricing and completion certainty.
The revised FBG proposal includes two payments: $175.0 million upon the initial completion of the deal and an additional $50.0 million at a later stage.
Following the receipt of a non-binding indicative offer for our US business from DraftKings, the PointsBet team entered negotiations with both parties.
The FBG deal, if approved, would grant the company access to 12 states, including key betting and iGaming markets such as New York, New Jersey, Pennsylvania, and Michigan. This would significantly accelerate FBG's sports betting rollout, expanding its reach beyond the states where it is currently live.
The withdrawal of DraftKings from the process followed criticism from Fanatics CEO Michael Rubin, who described DraftKings' higher bid as a desperate attempt to impede progress on FBG's deal with PointsBet. DraftKings announced that it would no longer pursue the acquisition of the company, expressing gratitude for their cooperation during the process.
The developments surrounding the sale of PointsBet's North American arm came after the company confirmed discussions with multiple parties in April. Previously reported talks to sell its Australian business to a News Corp-backed gaming venture were terminated. However, PointsBet remained in discussions with other third parties interested in acquiring the business.
FBG's ambitions for growth in the US were highlighted by CEO Matt King in a previous interview. King emphasized the company's ability to roll out states whenever it wanted and expressed confidence in offering an elevated product to disrupt the established order.
PointsBet recently reported a 39% YoY increase in revenue to AU$106.6 million in the first quarter. The growth was driven by the North American segment, which saw a 103% YoY increase in revenue to $49.8 million. Despite the positive revenue growth, PointsBet expects an EBITDA loss of $77.0 million to $82.0 million for H2 FY3 and has implemented cost-cutting measures to drive the business toward profitability.
With the improved proposal from FBG, PointsBet shareholders face an important decision in the upcoming vote, as the deal could shape the company's future in the US market while allowing it to focus on opportunities in Australia and Canada.
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