A month after agreeing to sell its U.S. operations to Fanatics Inc., Australia-based gaming company PointsBet Holdings Ltd. received a higher offer.
Boston-based DraftKings Inc., a competitor of PointsBet, offered to buy those operations for $195 million, both companies announced June 16.
PointsBet announced May 15 it agreed to sell its U.S. business for $150 million to Fanatics Betting and Gaming.
Fanatics, the sports merchandise company founded in the Jacksonville area, is seeking to buy PointsBet as part of its plan to expand into sports gambling.
“The directors of PointsBet are committed to acting in the best interest of all shareholders and are considering the DraftKings proposal alongside its advisers,” publicly traded PointsBet said in its June 16 news release.
In a follow-up release on June 19, PointsBet said it will engage with DraftKings. However, in the absence of a binding offer from DraftKings, the board is continuing to recommend shareholders vote in favor of the Fanatics offer at a June 30 special meeting, it said.
Privately owned Fanatics hasn’t issued any public announcements on the PointsBet deal but Fanatics CEO Michael Rubin told CNBC he is skeptical about the DraftKing’s offer.
“It’s a move to delay our ability to enter the market,” Rubin told the business news cable network, according to a story posted on CNBC’s website.
“I guess they are more concerned about us than I would have thought,” he said.
PointsBet said in May when it announced the Fanatics deal that it was selling its U.S. operations because of the high cost of doing business in the U.S.
Publicly traded DraftKings is already a large sports betting company, with $770 million in first-quarter revenue.
“While we continue to focus on operating more efficiently and driving substantial organic revenue growth in the United States, we will also look to prudently capitalize on compelling opportunities at attractive valuations, as is the case with PointsBet’s U.S. business,” DraftKings CEO Jason Robins said in a news release.
“We believe DraftKings is uniquely positioned to submit this superior proposal due to our scale and corresponding ability to generate meaningful synergies from the acquisition,” he said.
Fanatics, founded with a single retail store in the Orange Park Mall in 1995, has turned into a sports merchandising giant valued at more than $30 billion.
Founders Mitchell and Alan Trager sold the business in 2011 to a Philadelphia company run by Rubin, who has expanded the company beyond its initial sports merchandising business.
The company maintains its commerce headquarters in Jacksonville, according to the Fanatics website, which lists six major office locations.
A notice of the special shareholders meeting filed by PointsBet said Fanatics is headquartered in Jacksonville, New York and London.