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DraftKings’ bid to outmaneuver rival sports betting entity Fanatics for control of PointsBet’s U.S. operations has flopped, as PointsBet’s board is unanimously recommending a newly sweetened offer from Fanatics.
After DraftKings earlier this month made a non-binding, $195 million offer for the American operations of PointsBet, topping Fanatics’ original $150 million deal, Fanatics came back on Monday with a new $225 million bid, a 50% jump.
Additionally, DraftKings missed PointsBet’s Tuesday deadline to submit a binding offer.
As a result, the PointsBet’s board is now firmly standing behind Fanatics ahead of a scheduled shareholder vote on Friday in Australia.
The Fanatics offer “is superior in terms of both pricing and certainty of being able to complete on a timely basis,” PointsBet said late Tuesday.
DraftKings’ surprise entry initially represented a rare business obstacle to Fanatics amid a meteoric expansion in recent years beyond its sports merchandising origins into areas such as trading cards, collectibles auctions, content, and sports betting.
Ultimately, though, Fanatics was able to flex significant muscle, not surprising given their $31 billion valuation, and will now compete directly against DraftKings in a still-developing U.S. betting market, including in top-performing states such as New York, New Jersey, Pennsylvania, and Michigan.
Fanatics CEO Michael Rubin previously branded the DraftKings move for PointsBet as “desperate.”
In the new deal structure, Fanatics will pay $175 million at closing, up from $100 million in the original offer, and another $50 million in early 2024.
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