DraftKings Submits Superior Proposal to Acquire PointsBet’s U.S. Business - Seite 2

While we understand that PointsBet is currently party to a Stock and Equity Sale Agreement (the “Existing Agreement”) with Fanatics Betting and Gaming (“Fanatics”) for the sale of the US Business, our Indicative Offer and the Proposed Transaction delivers a significant premium to Fanatics’ offer for the US Business, and we believe that your board of directors will agree that it constitutes a Superior Proposal as defined under your Existing Agreement, both due to the value it would deliver to your shareholders and our expected ability to consummate the Proposed Transaction more quickly with improved consideration and otherwise on terms that are substantially similar to those you have agreed with Fanatics.

Key Elements of the Indicative Offer & Proposed Transaction

The terms and conditions of our Indicative Offer and the Proposed Transaction are as follows:

1. Transaction Perimeter and Structure: We propose to acquire the US Business under terms and conditions (other than the more attractive proposed consideration) that are substantially consistent with your Existing Agreement with Fanatics, as described in Annexure A of your May 15, 2023 press release.
2. Purchase Price and Consideration: We are offering to acquire the US Business for USD $195 million in cash, on a debt-free and cash-free basis. Our Indicative Offer represents a 30% premium to Fanatics’ proposal of USD $150 million under the Existing Agreement.
3. Financing: The Proposed Transaction will not be subject to any financing condition, as DraftKings would complete the Proposed Transaction using cash from its balance sheet and does not need to raise any additional capital.
4. Required Approvals and Timeline to Closing: DraftKings expects that customary regulatory approvals, including the approval of gaming regulators in relevant U.S. jurisdictions, will be required in connection with the Proposed Transaction. As a licensed entity in all of the jurisdictions in which you operate the US Business, we believe that we are uniquely positioned to obtain the requisite regulatory approvals on a more expedient timeframe than under your Existing Agreement with Fanatics. This higher level of deal certainty and speed to completion will enable PointsBet to return capital to its shareholders more quickly, which represents another reason that our Indicative Offer is superior to your Existing Agreement with Fanatics.
5. Internal DraftKings Approvals and Conditions: Our Indicative Offer has the full support of the highest levels of our organization. Our Transaction Committee and executive leadership team have been informed of this Indicative Offer and are enthusiastically supportive. However, as is customary, DraftKings’ entry into definitive agreements will be subject to the satisfactory completion of our reasonable due diligence, the negotiation of mutually acceptable transaction documentation and final internal approvals.
6. Due Diligence; Timeline to Signing a Definitive Agreement: Given the due diligence work already performed based on publicly available information, we are prepared to move forward quickly and efficiently with a targeted due diligence process. Subject to prompt access to management and requested information, we are confident that due diligence could be completed and definitive agreements executed in approximately three weeks.

We believe that this Indicative Offer constitutes a Superior Proposal, such that PointsBet may engage with us towards the consummation of the Proposed Transaction consistent with its obligations under the Existing Agreement with Fanatics.