Takeovers Panel Upholds PointsBet Share Issuance Amidst Bidding Battle

Context of the Takeover Battle

PointsBet Holdings Limited finds itself at the centre of a high-stakes takeover tussle, with two rival bidders, betr Entertainment Limited and MIXI Australia Pty Ltd, vying for control. The recent issuance of 10,750,550 new PointsBet shares, triggered by the vesting of performance share rights, has added a new layer of complexity to this contest. betr challenged this move, alleging it was a strategic manoeuvre to tilt voting power in MIXI’s favour during the critical final days of the offer period.

The Panel’s Deliberation and Decision

The Takeovers Panel, tasked with ensuring fair play in corporate control battles, carefully considered betr’s application. Central to the dispute was whether PointsBet’s board reasonably anticipated a change of control, justifying the acceleration of performance share rights. The Panel concluded that, given the competing bids and commercial realities, the vesting and subsequent share issuance were within the board’s discretion and aligned with market norms.

Importantly, the Panel noted that most of these newly issued shares were likely to be accepted into MIXI’s bid under ordinary circumstances. This acceptance would naturally influence the balance of power but did not constitute an unfair advantage or unacceptable circumstance warranting intervention.

Implications for the Market and Stakeholders

This ruling reinforces the principle that boards retain significant discretion in managing equity plans during takeover bids, provided their actions are reasonable and transparent. For investors, the decision signals that the market mechanisms governing control contests remain robust and that strategic equity issuances will be scrutinised but not unduly constrained.

For betr, the rejection is a setback but not necessarily the end of the road. The dynamics of the takeover battle will continue to evolve as the offer period progresses, with voting power shifts and acceptance levels closely watched by all parties.

Looking Ahead

The Panel’s detailed reasons for the decision are forthcoming, which may shed further light on the nuances of this complex case. Meanwhile, PointsBet’s shareholders and market observers will be keenly monitoring how the competing bids unfold, especially as the automatic bid extension mechanism under the Corporations Act comes into play.