The shareholders of Australian gambling company Tatts Group are to vote on the proposed AU$11-billion merger with the company’s rival Tabcorp in two weeks, regardless of the risk that the deal could once again be challenged in court.
Reportedly, the Supreme Court of Victoria ordered Tatts Group to initiate a vote on its possible merger with Tabcorp on December 12th. At the same time, the Supreme Court also revealed that the local consumer regulatory authority as well as CrownBet, the rival online bookmaker which has strongly opposed to the deal, would be given the right to appeal until December 20th.
Tatts’ Executives Urge Shareholders to Back the Merger
The supplementary scheme booklet of Tatts Group revealed that there was still risk that further legal action, including a review application or an appeal of the decision of the Australian Competition Tribunal (ACT), to be made.
According to the booklet, despite the fact that the two companies believe that a judicial review application or appeal leading could hardly lead to unfavourable outcome for the merger and the combined company, Tatts Group shareholders would be advised to become acquainted with the possible consequences and seek independent professional opinion in case they had any doubts related to the deal.
The booklet also revealed that the management team of Tatts Group were unanimous in their decision to recommend that their shareholders should vote in favour of the deal, which could deliver an amount of approximately AU$130 million on an annual basis.
To make things even better, Tatts Group revealed that its net profit experienced a massive increase thanks to a series of large lottery jackpots. According to the company, digital lotteries represented over 16% of the overall lottery sales of Tatts Group. The gambling operator revealed that its net profit generated from continuing operations in the third fiscal quarter rose by almost 15% in comparison to the same period a year earlier and reached AU$67.2 million.
Tabcorp-Tatts Group Setbacks and Delays
Currently, Tabcorp and Tatts Group are among the largest operators on the territory of Australia. The two companies announced a multi-billion merger proposal in 2016, but since then their plans have faced both legal hurdles and delays.
Recently, the deal was sent for a second time for review to the Australian Competition Tribunal, after the Tribunal’s initial approval of the proposed merger was challenged by the Australian Competition and Consumer Commission (ACCC). The ACCC claimed that the ACT had made certain errors in its assessment of the possible negative impacts that the tie-up could have on the gambling landscape of the country after the two companies merge in a gambling behemoth.
After a thorough of the merger proposal, the Tribunal once again gave the green light to the deal, saying that the potential threats to competition were not as serious as the Australian Competition and Consumer Commission claimed them to be. According to the ACT, the completion of the deal could even boost competition in the Australian online gambling market.
The two major opponents of the Tabcorp and Tatts Group merger – the ACCC and CrownBet – did not provide any commentary on their future plans whether to seek another review of the Tribunal’s merger approval. It they decide to appeal the greenlighted merger, the deal would not happen until 2018.
- Author
Olivia Cole
