Tabcorp Switches to ACT Regulatory Supervisors
The proposed $11 billion merger between Australian wagering giants Tabcorp and Tatts is looking more likely to go forward now that Tabcorp has switched regulatory supervisors.
Tabcorp has confirmed that they have withdrawn their application for informal clearance from the Australian Competition and Consumer Commission (ACCC) and has lodged an application with the Australian Competition Tribunal (ACT) in its place. Tabcorp believes it has a more compelling case with the ACT which evaluates issues of public benefits and not just issues of lessening competition.
In a notice to investors confirming the move, Tabcorp stated: “Tabcorp has formed a view that it has a compelling case to pursue a merger authorisation application in the Australian Competition Tribunal. Under the authorisation test, the Tribunal balances public benefits of the proposed Transaction against likely detriments, including competitive detriments. This differs from the test the ACCC applies, which is limited to assessing whether a proposed acquisition is likely to substantially lessen competition and is not able to take into account countervailing public benefits. The merger authorisation will likely deliver greater Transaction certainty compared to the informal clearance process by requiring the consideration of public benefits. Importantly, the merger authorisation application is considered within a statutory timetable.”
This decision has been made a week after the ACCC released a preliminary statement of issues expressing a number of concerns which resulted in Tabcorp announcing that they would plan to sell their Odyssey gaming machine monitoring business to address some of the concerns raised.
Commentators in the industry have wondered if this move suggests that Tabcorp believed their merger would be rejected by the ACCC; however Tabcorp insists that the merger has already been approved by a majority of corporate investors, as well as wider Australian gambling stakeholders, such as community officials and racing and leisure venues.
March 23, 2017