Fanatics, the sports platform company, has made a higher offer to acquire the U.S. business of PointsBet, an Australian online sports betting operator, in a bid to beat its rival DraftKings.
Fanatics has increased its offer by 50% to $225 million, after DraftKings made a non-binding offer of $195 million earlier this month. PointsBet shareholders will vote on the new offer on Thursday night.
The board of PointsBet has unanimously endorsed the Fanatics offer, saying it provides a better price and certainty for the shareholders. PointsBet gave DraftKings a deadline of Tuesday night to make a binding offer, but DraftKings did not do so.
DraftKings CEO Jason Robins had said that acquiring PointsBet’s U.S. business would not have been transformative for DraftKings, but it would have helped the company gain market share in the competitive U.S. sports betting market.
The deal, if approved, will give Fanatics access to 15 U.S. states where PointsBet operates as the seventh-largest sports betting operator. Fanatics CEO Michael Rubin had told CNBC that he was skeptical of DraftKings’ offer, which he saw as an attempt to delay Fanatics’ entry into the market.
“It’s a move to delay our ability to enter the market,” Rubin said. “I guess they are more concerned about us than I would have thought.”
PointsBet Chairman Brett Paton said that the deal would secure a strong future for the U.S. team as part of Fanatics, and that PointsBet would continue to pursue opportunities in Australia and Canada with a strong balance sheet.