PointsBet Holdings Limited, in the matter of PointsBet Holdings Limited (No 2) [2025] FCA 645 (17 June 2025)

1. On 9 May 2025 I published reasons in PointsBet Holdings Limited in the matter of PointsBet Holdings Limited 2025 FCA 463 for making of orders on 8 May 2025 pursuant to ss 411(1) and 1319 of the Corporations Act 2001 (Cth) (the Act). Those orders concerned a scheme arrangement proposed by PointsBet Holdings Limited (who I refer to as PointsBet or the Plaintiff), to effect the acquisition of all of PointsBet's shares by Mixi Australia Pty Ltd (Mixi), in return for a cash payment. At that stage the cash payment was $1.06 per share, a Scheme Meeting was intended to take place on 12 June 2025, but a power of adjournment was included in the orders I made at that time.
2. In those reasons I set out the background to the scheme, including its commercial purpose, and I do not repeat it here, save to the extent it is relevant below.
3. The orders of 8 May 2025 permitted PointsBet to postpone the Scheme Meeting. PointsBet did so by way of an announcement on the ASX Market Announcements Platform on 3 June 2025, postponing the Scheme Meeting until 25 June 2025.
4. PointsBet now seeks orders permitting it to make supplementary disclosure for the purpose of that meeting to be held on 25 June 2025. That application is supported by a second affidavit of Mr Lance Brett Sacks dated 16 June 2025. That affidavit annexes the proposed supplementary scheme booklet and draft ASX announcement to accompany publication of the supplementary scheme booklet.
5. The purpose of the supplementary disclosure that PointsBet has made to shareholders relates to three principal matters:

(1) the increase in the scheme consideration from $1.06 to $1.20 per PointsBet share;

(2) the entry into the bid implementation deed; and

(3) the status of an alternative proposal by Betr Entertainment Limited (Betr).

1. The Australian Securities and Investments Commission (ASIC) has been provided with a copy of the supplementary scheme booklet and has said that it does not have any comments at this time.
2. PointsBet proposes to make the supplementary scheme booklet available to shareholders via an ASX announcement on 18 June 2025, which is seven days before the Scheme Meeting and five days before the proxy cutoff time.
3. The directors of PointsBet continue to unanimously recommend that shareholders vote in favour of this scheme, and the independent expert remains of the opinion that the scheme is fair and reasonable and is therefore consistent with the best interests of PointsBet's shareholders.
4. On 16 June 2025, PointsBet made an ASX announcement that:

(1) PointsBet intend to provide a supplementary scheme booklet prior to the Scheme Meeting, setting out further information in relation to the scheme, the takeover offer and other developments, and that PointsBet intends to publish the supplementary scheme booklet through the ASX Market Announcements Platform, subject to obtaining a court order; and

(2) PointsBet shareholders should be aware that at the Scheme Meeting they will be voting on the scheme as originally proposed but on the basis that PointsBet at the second Court hearing will seek the Court's approval of an amended version of the scheme to reflect the increased scheme consideration.

1. Also on 16 June 2025, PointsBet announced via the ASX Market Announcements Platform that PointsBet had decided to reject the alternative proposal by Betr, and that discussions between PointsBet and Betr in relation to an alternative proposal have ceased.

1. I will briefly set out the principles relating to supplementary disclosure. In Security Matters Limited, in the matter of Security Matters Limited (No 2) [2023] FCA 40 (SMX (No 2)), O'Bryan J summarised the principles relevant to supplementary disclosure applications of this kind at [24] (citations omitted):

It is uncontroversial that a company proposing a scheme of arrangement has an ongoing obligation to bring to the attention of members or creditors all material new information that arises after the scheme booklet has been dispatched. The Court has power under ss 411(1) and 1319 of the Act to vacate or vary orders made under s 411 in relation to a scheme meeting (whether or not the meeting has commenced), authorise the dispatch of further explanatory material, and make orders as to the validity of proxies lodged in relation to a scheme meeting.

1. Matters to be considered concern timing, mode and form of supplementary disclosure. The relevance of these matters as noted by Beach J in Carbon Revolution Limited, in the matter of Carbon Revolution Limited (No 2) [2023] FCA 1173; 169 ACSR 225 (CBR (No 2)) at [12] and [13]:

Now in terms of the period up to the vote at the scheme meeting, the timing, mode and form that such supplementary disclosure takes depends upon the context of what has already been disclosed, whether in the scheme booklet already despatched or by other means, the time available for its consideration between when the scheme company first became aware of the information and when the scheme meeting is to occur and, in terms of mode, the real utility of the new information and how it can be expressed in a meaningful way for shareholders such as to avoid information flooding and cognitive overload, particularly for less sophisticated individuals. The twin virtues of accessibility and comprehensibility must guide both the mode and form of communication of the supplementary disclosure.

It should also go without saying that the supplementary information should be the subject of the same rigorous verification process as occurred for the information in the scheme booklet, allowing of course for differences in the limited time available before the scheme meeting and the nature of the new information.

1. There is no question that the information the subject of the supplementary scheme booklet is material and must be disclosed. As noted above, ASIC has considered the contents of the supplementary scheme booklet and said it does not have any comments at this time. It has elected not to appear or make any submissions.
2. I am satisfied that the supplementary scheme booklet has been verified in the same way the original was verified and am likewise content the mode of supplementary disclosure, being by way of ASX announcement, is appropriate in the circumstances.
3. In particular, in this case the shareholders were previously informed that updates could be provided by way of ASX announcement. I refer in particular to clause 9.14 of the first scheme booklet, in addition to the general expectation of shareholders that announcements will be made through that platform. This is broadly consistent with the approach of Beach J CBR (No 2) at [92]. In addition, the first scheme booklet, under a heading "When and where will the Scheme Meeting be held", stated:

Please monitor the PointsBet website at ASX announcements where updates will be provided if it becomes necessary or appropriate to make alternative arrangements for the holding or conduct of the scheme meeting.

1. A core concern that I have had in this application is the timing of the supplementary disclosure, in particular, whether ordinary shareholders will have time to consider the new information. ASIC Regulatory Guide 60 Schemes of Arrangement provides what was often referred to as the "10-day rule" in the following terms:

Supplementary information

RG 60.95 If a scheme company proposes to amend the terms of a scheme, or otherwise provide supplementary information to its members, after the dispatch of the explanatory statement, it is important that all members who are required to vote on a scheme have adequate time to consider that supplementary information before they decide to accept or reject the scheme.

RG 60.96 It will generally be appropriate for scheme participants, including those voting by proxy, to be given at least 10 days to consider any supplementary documentation distributed before being required to vote on the scheme.

1. In this case, the PointsBet proposal would allow shareholders five days between publication of the supplementary scheme booklet and the closing time for proxies and seven days before the Scheme Meeting. Two of those days are, of course, over a weekend.
2. In CBR (No 2), Beach J considered that supplementary disclosure eight days before the proxy deadline was sufficient, having regard to the fact the market had already been notified of the new developments by way of ASX announcement (at [88]).
3. PointsBet also point to Security Matters Limited, in the Matter of Security Matters Limited (No 3) [2023] FCA 140; 167 ACSR 294. In that case the relevant change was the opinion of the independent expert who concluded in a supplementary report that each of the schemes was not fair and reasonable and not in the interests of security holders. That updated opinion was published on 14 February 2023, with the meeting to be held on 20 February. The Court considered that this period was sufficient because the possibility had previously been foreshadowed in the scheme booklet and in prior supplementary disclosures and ASX announcements (see, in particular, [23]-[29], [69], [98]-[107] and [154] (O'Callaghan J)).
4. PointsBet submit that shareholders will have sufficient time in this case because they will have seven days before the Scheme Meeting, and five days before the proxy cut-off time, in circumstances where the updated material is largely beneficial to shareholders. Shareholders have had the benefit of the first scheme booklet which identified the potential for changes and identified the nature and type of alternative proposal being put by Betr and a range of the other matters that are the subject of the subsequent disclosures.
5. In addition, it is relevant that shareholders were provided with information relevant to the scheme consideration and takeover offers that are now to be put before them via ASX announcements on 3 June and 16 June 2025. I am satisfied that a range of disclosures have taken place. On 3 June the terms of the takeover were announced, including the potential for an off-market takeover bid, and the increase in price to $1.20 per share. There was further disclosure concerning the deed engaged in with Mixi on 16 June 2025. There were further updated terms and details provided about the offer via the ASX Market Announcements Platform on 16 June 2025 and the rejection of the Betr proposal was announced on the ASX also on 16 June 2025.
6. I accept that the updates proposed are relatively straightforward and are made in the context of disclosure already having occurred in the context of a structured framework for that disclosure to take place of which shareholders are made aware at the time of the first scheme booklet.
7. Given that the directors' recommendation and the expert opinion remains static, and that the disclosure of the substance of the issues is relatively straightforward and has been well publicised, I am content it is appropriate to make the orders in the slightly revised form sought by PointsBet.
8. I note that in relation to proxies there are a number of examples of cases where in the context of ordering supplementary disclosures courts have also ordered that valid proxy forms already lodged remain valid but any appointment pursuant to those proxy forms can be varied by the appointment of a shareholder up until a prescribed time. I note in particular that this was the approach in CBR (No 2) at [93] and the orders in SMX (No 2). PointsBet propose to adopt the same course and I am content to endorse that approach.
9. I will therefore make the orders in the terms sought.

I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Bennett.