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Tuesday, April 23, 2024
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Fanatics Faces Possible Bidding War After DraftKings’ Bid For PointsBet

  • Surprise offer represents rare speed bump for sports industry colossus
  • PointsBet for now recommending Fanatics offer to investors ahead of company review
Michael-Rubin-Fanatics
Fanatics

Little has stood in the way of Fanatics’ meteoric business expansion over the past five years — but now, the sports industry colossus faces a very public and potentially costly obstacle from DraftKings.

On Friday, the Massachusetts-based DraftKings submitted a surprise $195 million, all-cash, and unsolicited bid for PointsBet’s U.S. operations, seeking to supplant the $150 million deal Fanatics made for that company a month ago.

The offer represents a rare speed bump for Fanatics, which has mushroomed beyond its sports merchandising origins into trading cards, international sales, collectibles auctions, content, and sports betting — all while building its company value to a stratospheric $31 billion. Only a broader decline in NFTs has forced a significant market retreat.

Company chief executive Michael Rubin didn’t mince words, calling DraftKings’ offer “a desperate move to slow down Fanatics and PointsBet from completing a deal,” adding on CNBC, “I guess they are more concerned about us than I would have thought.”

Rubin and Fanatics seem to have support from PointsBet, as that company said in a note to investors that the DraftKings offer will be considered, but that for now, “subject to the outcome of the review being undertaken of the DraftKings proposal, the board continues to recommend that shareholders vote in favor of the [Fanatics] transaction” at a meeting set for June 30.

Several financial analysts cheered the DraftKings move and predicted a full-out bidding war, which suggests the PointsBet battle is just getting started.

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