Consortium Offer for Tatts Group Could Disrupt Tabcorp Merger
Tatts Group has become the object of a bidding war since a consortium of investors led by Macquarie Group made a bid worth up to A$7.3 billion for the company. This bid could disrupt the merger plans of Tatts and Tabcorp, the two major Australian gambling companies.
The consortium has offered $4.40 to $5 per Tatts share, which is more than the $4.34 per share that Tabcorp offered per Tatts share in October, in their effort to form an $11.3 billion giant gambling group.
Tatts operates a lottery business, plus offers betting on horse racing and sports across Australia and New Zealand. The offer from the consortium is more complex than the Tabcorp offer with the consortium looking to acquire the Tatts lottery business and separate it from its TAB wagering and gambling division, which it would sell.
Today, Brisbane-based Tatts said in a statement to the Australian Securities Exchange that they had “not yet formed a view” on how the bid from Pacific Consortium compared to the Tabcorp bid. However, they stated that until a review of the offer was made, directors at Tatts believed that the offer from Tabcorp remained in the best interests of shareholders and that they would continue to support the offer unless a superior proposal was presented.
While Tatts and Tabcorp announced the terms of their merger in October, speculation about a rival for Tatts remained. In the meantime, last month, Tabcorp acquired a 10 percent stake in Tatts, making it more difficult for a rival to step in. Tabcorp itself may become the subject of a takeover bid with UK-based Ladbrokes Coral expressing interest in the company. It is still unclear if the merger plans between Tatts and Tabcorp will continue or the latest developments will disrupt them.
March 23, 2017