BlueBet Completes Acquisition of TopSport

BlueBet Holdings announced on 1st April the completion of its acquisition of certain assets from Merlehan Booking, the Australia-facing sports and racing betting company known publicly as TopSport.

The completion of the acquisition follows the successful overnight migration of TopSport customers to the BlueBet-operated Betr platform. This agreement, struck just in February, was finalized in under two months.

As part of the initial settlement, BlueBet has made a cash payment of AU$1.5 million (£735,890/€879,870/US$950,669). This amount represents the completion payment after accounting for TopSport customer account balances, pending bets, and employee entitlements.

Additionally, BlueBet has issued 8,823,529 fully paid ordinary shares to Merlehan Family Investments, the nominee entity for TopSport. There is also potential for another 23,000,000 performance options and extra cash payments, contingent on TopSport achieving certain milestones.

According to BlueBet, this acquisition moves the Betr brand closer to achieving a 10% to 15% market share “sweet spot” in Australia.

BlueBet pledges a ‘frictionless’ experience for TopSport users as the deal concludes with the secure migration of over 63 million rows of TopSport customer data overnight, including transactional data, pending bets, and account balances. BlueBet stated that this ensures a seamless experience for TopSport customers, who will now have access to the Betr platform.

Furthermore, TopSport CEO Tristan Merlehan has joined BlueBet’s management team, where he will serve as the chief trading officer in the expanded business.

In remarks about the acquisition, BlueBet CEO Andrew Menz emphasized the fast-paced nature of the deal’s completion. “We have successfully completed the acquisition of TopSport, executing an innovative transaction structure that enabled us to migrate TopSport customers onto the Betr platform prior to completion,” Menz stated.

“This materially de-risked the transaction and ensured that all anticipated cost synergies were fully realised within just 55 days of announcing the deal. This was without the need to operate the TopSport brand or wagering platform during the transition.

“This outcome reflects our repeatable and scalable M&A model, underpinned by the speed and precision of our migration team. Our ability to rapidly execute on the integration and migration with no disruption to our offering remains a key competitive advantage, delivering immediate value for our shareholders.”

Menz also provided an update on BlueBet’s interest in acquiring PointsBet. In February, BlueBet proposed a bid valued at $360 million for PointsBet, which consists of a cash component between $240 million and $260 million, along with scrip consideration ranging from $100 million to $120 million. Moreover, BlueBet has identified annual synergies of at least $40 million.

This offer represents a scrip bid, a type of takeover in Australia where shares are offered either partly or wholly in lieu of cash. BlueBet estimates that over 20% of PointsBet shareholders would prefer a transaction incorporating a scrip element over a cash-only proposal.

However, the situation has not been entirely straightforward for BlueBet. In February, PointsBet approved an alternative bid from MIXI Australia, which would facilitate the transfer of 100% of PointsBet’s shareholding to the Australian branch of the Japanese digital entertainment and sports group, MIXI Inc.

Should PointsBet shareholders endorse that deal, they would receive $1.06 per share in cash, which reflects a substantial premium of 27.7% to PointsBet’s closing price as of 25 February, totaling about $353 million. A vote on this deal will take place in late May.

Despite the uncertainty surrounding the MIXI bid, Menz insists that BlueBet has put forth an attractive offer. He indicated that further discussions with the PointsBet board are on the horizon.

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“With the successful integration of TopSport, our focus now shifts to further inorganic growth opportunities in the Australian market, including our compelling and fully funded proposal to acquire PointsBet,” he remarked.

“By providing the flexibility for PointsBet shareholders to choose a mix of cash and scrip, we believe ours is a superior proposal for shareholders to realise value in the short and long term.

“Our engagement with PointsBet shareholders remains overwhelmingly positive, and we look forward to progressing our discussions with the PointsBet board.”