PointsBet Halts Trading Pending Announcement

Posted on: June 27, 2023, 03:37h. 

Last updated on: June 28, 2023, 11:09h.

Trading in PointsBet (OTC: PBTHF) stock was halted in Australia on Tuesday for an upcoming, though not described, news event.

PointsBet advertising at the Pepsi Center in Denver. The company requested a trading halt in its stock on Tuesday pending a material announcement. (Image: The Business Journals)

A market announcement with the Australia Securities Exchange (ASX) confirmed the halt, noting it could be lifted on Wednesday, should the gaming company deliver a news release.

The securities of PointsBet Holdings Limited (‘PBH’) will be placed in trading halt at the request of PBH, pending it releasing an announcement. Unless ASX decides otherwise, the securities will remain in trading halt until the earlier of the commencement of normal trading on Wednesday, 28 June 2023 or when the announcement is released to the market,” according to a regulatory document.

In a letter to Dale Wang, ASX adviser for listings compliance, PointsBet General Counsel Andrew Hensher requested the trading halt. PointsBet’s US-listed shares, which trade over the counter, were also halted on Tuesday.

PointsBet Could Announce Sale News

To be clear, PointsBet did not reveal the topic of the upcoming news announcement. But Hensher wrote in the letter that the trading halt was requested “to enable it to manage its continuous disclosure obligations in relation to a material transaction.”

This month, the company’s US unit has been a hotbed of acquisition speculation, as Fanatics launched a $150 million all-cash bid for that segment. That was later topped by a $195 million all-cash offer from DraftKings (NASDAQ: DKNG).

The timing of the trading halt is relevant because PointsBet is holding an investor meeting on Friday, at which time, shareholders could vote to approve the deal with Fanatics. That’s also the same date by which DraftKings must formalize its offer for PointsBet US.

Less than 10 days ago, PointsBet confirmed it will engage in discussions with DraftKings. But it told investors that it continued recommending they vote in favor of the Fanatics proposal because the DraftKings bid is not binding as of yet.

Other Possibilities for PointsBet

For now, it’s just speculation. But the upcoming news release from PointsBet could pertain to a variety of factors. It’s possible that another suitor — not DraftKings or Fanatics — has entered the fray. Not out of the realm of possibility is the point that PointsBet could announce the sale of its Australian business or another segment, though that hasn’t been confirmed.

Another possibility, and one analysts view as credible, is that Fanatics upped its offer. PointsBet would have to disclose that information to investors. Privately held Fanatics hasn’t said it will boost its bid for PointsBet US.

There are rumors of bad blood between DraftKings CEO Jason Robins and Fanatics CEO Michael Rubin. How deep that animosity runs and how willing the two are to engage in a full-fledged bidding war for PointsBet US remains to be seen. Clarity could arrive on Wednesday.