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A computer error during a shareholder vote at Australian corporate bookmaker listco PointsBet wrongly omitted the “no” votes of takeover rival Betr Entertainment, invalidating the acquisition by Japan’s MIXI group.
The latest twist in the battle between Betr and MIXI for PointsBet has seen the result of the shareholder vote revised and the MIXI acquisition frustrated after investor services company Computershare admitted it “incorrectly excluded” Betr’s rejection of the MIXI offer.
The Computershare returning officer originally told PointsBet officials that a Betr representative had “revoked the Betr proxy but not cast a vote at the meeting and that accordingly the [19.9 percent share] held by Betr were not voted”, according to a Computershare letter to PointsBet on Wednesday.
Computershare later confirmed the erroneous result in writing to PointsBet legal advisors Baker McKenzie before a “system error” was identified and the advice revoked late on Wednesday, the letter said.
With Betr’s votes restored to the count, support for the proposal to accept MIXI’s A$400m ($260m) offer fell to 70.48 percent, below the 75 percent threshold for carrying the proposal.
Betr, the trading name of Australian-listed BlueBet Holdings, had threatened legal action when it learned of the initial outcome, but this now appears unnecessary as PointsBet’s pro-MIXI board turns to a newly revealed back-up offer by MIXI.
MIXI said in a follow-up statement on Thursday that it is now proceeding with an off-market takeover bid developed in consultation with a unanimous PointsBet board in the event that the vote was lost.
The revised A$402m bid “delivers certainty of value in the form of cash consideration for all PointsBet shareholders, in contrast to the proposed all-scrip offer announced by Betr [on June 20] which MIXI considers to be subject to numerous uncertainties”, MIXI said.
It said the all-cash offer amounts to a 45 percent premium on the closing share price of PointsBet on February 25, the day MIXI’s takeover offer was announced.
“MIXI Australia is encouraged by the fact that over 95 percent of votes cast by PointsBet shareholders (excluding Betr) were in favour of the scheme, demonstrating positive support of MIXI's proposal to offer superior and more certain all-cash value,” the company said.
“The choice for PointsBet shareholders is clear: accept our proposal and receive A$1.20 per share in cash, as opposed to what is currently a lower scrip offer (with the uncertain prospect of receiving cash only if a share buy-back is approved at some time in the future).”
The PointsBet board’s strong support for a MIXI takeover has not deterred Betr. The company founded by influential gambling identity and sports mogul Matthew Tripp has matched MIXI’s offers with counter-offers and hard-nosed tactics, culminating in Tripp’s purchase of 19.9 percent of the company earlier this year.
Betr's offer has also received support from institutional shareholders in PointsBet, primarily Wilson Asset Management and fellow investment manager Pendal, whose votes on Wednesday likely ensured that the status quo will be maintained for some months yet.
