The bidding war for the biggest gambling company in Australia just heated up, as Tabcorp has received a third acquisition offer.
BetMarkets Technology, which operates a local gambling platform, has made an AU$4-billion takeover bid for the betting and media arm of Tabcorp, which includes the company’s TAB business, the lottery brands The Lott and Keno, as well as the broadcaster Sky Racing.
This is not the first offer for the company’s wagering and media business, as the UK gambling giant Entain and the US investment manager Apollo have already approached Tabcorp with their offers. The British gambling operator Entain has placed an AU$3.5-billion offer, while Apollo Management offered to pay AU$3.5 billion for Tabcorp’s betting business and a further AU$500 million for its gaming services unit.
The Australian gambling giant’s betting unit has already been seriously affected by the restrictions associated with the coronavirus pandemic, which forced the cancellation of all major sports events and the closure of betting shops across the country. As Casino Guardian previously reported, the restrictive measures that were imposed by the national and states governments to fight the Covid-19 crisis resulted in a considerable boost of customer interest in online betting.
Gambling Giant Tabcorp Reviews Structural and Ownership Changes for Its Business
After making an announcement of the received takeover bid, Tabcorp said that it would take into consideration the offer. The Australian gambling giant further noted that it is still making a strategic review of its business and evaluating various structural and ownership options for it, as it is willing to add more value to its assets. The possible sale of its suffering betting and media arm is one of the options that are being considered by the company.
The non-binding proposal was made earlier today. Under the acquisition offer that has valued the betting and media business of Tabcorp at AU$4 billion, the Australian gambling giant’s investors would get AU$1 billion in cash and AU$3 billion in BetMakers shares.
Unfortunately for the owner of BetMakers, the company’s takeover bid faced an early hurdle as its stock suffered a 15% decline on Friday, which reduced its market value by AU$200 million to AU$1.1 billion. This would affect the takeover bid because the offer says that the number of shares to be received by Tabcorp investors will be decided upon the agreement of a deal. Also, the shares would be priced at a 15% premium to the share price of BetMakers.
For now, it remains unknown whether the latest takeover proposal for Tabcorp’s betting and media business would be found attractive by the Australian gambling giant’s shareholders. According to one of them, Jamie Nicol, the company’s betting business should be estimated at between AU$3.5 billion and AU$4 billion, excluding the media assets.
Experts say that the company’s board and investors need to consider the underlying value of BetMaker rather than its share price when making the evaluation of the bid. However, they also noted that not only the offer itself but the stage of BetMakers’ development would be considered by Tabcorp.
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Olivia Cole
