The beginning of the week saw Tabcorp Holdings Limited announce the completion of its institutional component that has been part of its underwritten accelerated renounceable entitlement offer for new company shares. The share offering process was aimed at raising gross proceeds estimated at about AU$600 million.
The completion of the abovementioned institutional component was confirmed by Paula Dwyer, Tabcorp’s Chair, who also said that the entitlement offer attracted approximately 97% take-up. Ms Dwyer further noted that the institutional shareholders, who did not take-up their entitlements, are set to receive an equivalent of AU$0.45 for each right not taken up.
Apart from that, the Board has provided the retail shareholders of Tabcorp with the chance to participate in the retail entitlement offer on a pro-rata basis under the renounceable entitlement offer structure. Such shareholders will also be able to realise some value for the entitlements they hold in case they do not take-up their rights.
Tabcorp’s Institutional Entitlement Offer (IEO) was officially announced on August 19th, 2020 and closed on the next day, raising approximately AU$371 million from subscriptions for about 114 million new shares issued at the price of AU$3.25 per share. As mentioned above, the IEO of the gambling company got strong support, with about 97% take-up of entitlements owned by eligible institutional shareholders of the company.
Coronavirus Shutdown Seriously Affected Australian Gambling Giant’s Profitability
Under the entitlement offer that Tabcorp announced last week, the gambling company’s eligible shareholders were invited to subscribe for 1 new ordinary share of Tabcorp for every 11 existing ordinary shares. As mentioned above, the new shares were valued at AU$3.25 per share.
Last week, Tabcorp revealed that its betting unit is expected to generate growth after finalising the integration of TAB and the UBET brand that was taken over through its merger with the Tatts Group in 2017. At the time, the gambling operator also unveiled that it faced a long period of uncertainty because of the coronavirus pandemic and revealed an AU$600-million equity raising that is supposed to help it deal with the unfavourable conditions following the Covid-19 crisis.
The Australian gambling giant revealed that it was writing down the value of its betting division by AU$1 billion after being hit by the lengthy closure of clubs, pubs and betting outlets, and all major sports leagues and events were postponed because of the novel coronavirus pandemic outbreak. The forced shutdown of the industry pushed the gambling giant to an annual loss estimated at AU$870, in comparison to an AU$361-million profit in the previous year.
Despite the considerable loss generated so far, the Chief Executive Officer of the group, David Attenborough, remained optimistic about the integration of the two betting brands of the company – TAB and UBET. He further noted that the group intended to continue investing in digitalisation and personalisation to boost capacity and improve customers’ experience.
- Author
Olivia Cole
