The Pointsbet Holdings Ltd (ASX: PBH) share price is starting the week strongly.
In morning trade, the sports betting company’s shares are up 16% to $1.59.
Why is the Pointsbet share price jumping?
Investors have been bidding the Pointsbet share price higher today after the company received an approach from US$11 billion rival DraftKings Inc (NASDAQ: DKNG) for its US operations.
According to the release, the company has received an unsolicited non-binding indicative proposal from DraftKings to acquire its US business for a headline purchase price of US$195 million in cash, on a debt-free and cash-free basis with no financing condition.
Last month, Pointsbet entered into an agreement to sell the business to Fanatics Betting and Gaming for a headline cash consideration of US$150 million.
However, after considering the offer over the weekend, the company’s board has decided that “the DraftKings Proposal could reasonably be expected to lead to a Superior Proposal.”
As a result, Pointsbet will now engage with DraftKings on its proposal. Though, it warns that the proposal does not constitute a binding offer or a commitment from DraftKings to negotiate or execute a definitive agreement. In light of this, there is no guarantee that the DraftKings proposal will result in a binding definitive agreement.
It has given DraftKings until 6pm on 27 June to complete its due diligence and finalise its proposal.
As things stand, Pointsbet continues to recommend the Fanatics Betting and Gaming offer to shareholders.
