TAYLOR COLLISON LTD BBT’s tactical acquisition of a 19.9% stake in PointsBet (PBH) has resurrected the chances of a successful combination of both the entities. With BBT having addressed the major concerns raised by PBH relating to its first proposal (funding, synergies and due diligence timelines), the probability of completing a merger transaction is now far greater. Should it proceed, the combined entity would have: - • ~10% market share enabling profitable growth at scale • Potential for ASX300 inclusion • A superior technology platform for faster innovation, and market leadership in data-driven generosity and synergy execution
Importantly, we see it creating significant value for BBT shareholders through >100% EPS accretion. We maintain our Outperform recommendation. Analysing the Combined Value of BBT and PBH To assess the combined value of BBT and PBH we have utilised FY26 consensus estimates for PBH and Taylor Collison FY26 estimates for BBT. We have also considered synergies of $41.6m, debt issuance of $120m, and the sale of parts of the PBH Canada assets for $AU45m as stated in the Betr Equity Raising Investor Presentation.
This results in combined EBITDA of $100.4m against an enterprise value of $620m, i.e. 6.9x EV/EBITDA. We are of the view that a fair multiple for a scale domestic wagering operator is 9.5x EBITDA. Therefore, if the merger was to occur, we believe there could be ~38% upside attributable to multiple expansion.
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