PointsBet Holdings Limited (PBH) Earnings Call Transcript & Summary

Please note, the questions should be related to the resolution being put for shareholders today, and we ask that shareholders limit their questions to 2 each to ensure all shareholders have an equal opportunity to ask a question. The company release will its full year results later in the week. And thus, I'll be unable to answer or any of the executives will be unable to answer any questions regarding the company's financial or trading performance today. Questions from those in attendance? Lara any online questions to Resolution 1. I'll move to Resolution 2. Resolution 2 seeks approval pursuant Section 200C of the Corporations Act for KMPs to receive a benefit, in the form of early vesting of performance shares rights on a pro rata basis as a result of the sale of the U.S. business. In accordance with the Key Employee Equity Plan rules, the Board has determined that unvested performance share rights held by members of the group leadership team (including the named executives for which approval is being sought ) will vest on a pro rata basis, calculated as time served between the commencement of the performance period, which was 1 of August 2022 and the expected completion of the proposed transaction being 31 March 2024. In making this determination the Board took into consideration various factors and alternatives. Firstly, the U.S. business is the company's main undertaking, and as such, the performance conditions attached to the PSRs are intrinsically linked to U.S. operations. Similar to the treatment, typically applied in a change of control scenario, the sale of the U.S. business has taken away from the executives' ability to achieve performance criteria over the full term of the performance period. The strategy to shift focus away from expansion and growth towards maximizing the amount of capital to be returned to shareholders following the sale of the U.S. business was a deliberate course of action and in the best interest of shareholders and the Board was pleased over 99% of the votes cast of the June AGM were in favor of that sale. The second factor considered was how critical it was that the sale of the U.S. business complete satisfactorily. Australia would have had significant implications for the company. Completion is estimated at this stage to occur in March 2024 with the company contractually responsible for ongoing operations of the U.S. business until the start. It is important that the remaining points of business post sale of the U.S. is set up for success. The successful separation of the U.S. business, and in particular, the technology platform will ensure that both Fanatics and our company can fully exploit the technology assets into the future. Board discretion with regard to the treatment of the unvested PSRs, in particular, the fact that they do not vest until the second completion of the sale is a vital retention and motivation tool for all staff, in particular the executives, to ensure a successful separation of the 2 businesses over a long transition period to March 2024. Pro rata basis, the time served a second close rather than full vesting was also deemed appropriate in this regard. It is important to note that the members of the leadership -- group leadership team are located in various jurisdictions and in seeking to ensure equal and fair treatment for all executives of the Board had to take into account the local tax securities law and market practices in each jurisdiction. The timing and structure of the capital returns and the implications of the value of the PSRs and underlying shares also formed part of the Board's considerations. For example, early vesting and application of a whole [indiscernible] was not considered practical given the withholding tax obligations upon vesting in certain jurisdictions and the requirement to immediately sell shares to cover the equity to comply with these obligations. Ultimately, the Board believes that the pro rata vesting and the second and the -- at the second close calculated at this time served to second close strikes an appropriate balance to motivate and retain key executives to ensure a successful completion of the sale of the U.S. business and to also establish the framework for a successful and well-managed business moving forward. The directors along with Mr. Swanell outstanding recommend -- sorry, with Mr. Swanell abstaining recommend that shareholders vote in favor of the resolution. The resolution summary of the votes received before the meeting now appear on the screen. I'll now open up for questions and discussions. Please note questions should be limited to the resolution being put to shareholders to date. Are there questions from the shareholders present in attendance here? Lara, any written questions that you've received online?

Not yet.

[indiscernible] for a second to see if anything comes through. No further questions. There were no questions. Well, we've reached the conclusion of the meeting. I would like to advise that shortly the voting will be closed. And we'll take a few more moments now to allow people to finish the voting. Please complete your voting now. [Voting]

Okay. Voting is closed. Thank you all for joining us. I've placed -- the update of the final vote will be noted for to the ASX in due course. Thanks for your attendance all. And as the business is now finished, the meeting is -- I declare the meeting closed. Thank you. Thanks for attending.