The British gambling operator Entain Plc is considering a new improved offer for TAB – the media and sports betting arm of Australian gambling giant Tabcorp – in order to eliminate the competition and eventually take over the lucrative assets.
That is why the interim results of Entain that are set to be published on July 8th are expected to be monitored closely by Australia’s sports betting incumbents, who are willing to check whether the British gambling group is to actually boost its acquisition offer for the TAB unit.
In February, Entain became the first operator to launch an acquisition bid for the betting and media assets of Tabcorp. The company then offered the price of AU$3 billion to take over the business, but the bid was immediately turned down by Tabcorp, as it seriously undervalued the assets. Then, in April, the British gambling giant revised its acquisition offer to AU$3.5 billion, with the bid remaining neither accepted nor rejected by the Australian company’s board, as it is still being assessed.
Now, rumour has it that the group is ready to come up with a considerably bigger takeover offer of more than AU$4 billion for Tabcorp’s betting and media assets.
Three Bidders Currently Compete for Tabcorp’s TAB business
Currently, the British gambling operator is one of the three companies that have formally submitted an offer to acquire TAB, along with Apollo Global and BetMakers.
The revised all-cash takeover bid of Entain was matched by Apollo Global, a US private equity firm, which joined the competition after failing to acquire the UK gambling company William Hill. Both their offers, however, have been outbid by the AU$4-billion cash-and-shares bid of the Australian betting and racing company BetMakers.
As mentioned above, Entain is now considering whether to place a third, substantially bigger offer in order to outshine the competition, positioning itself as the most logical suitor for Tabcorp’s wagering and media business. According to reports, the high-risk strategy is supported by the company’s investors, because a successful takeover bid would make Entain the largest betting company in Australia by the addition of TAB’s retail portfolio to its already existing services and merging its Sportingbet and Ladbrokes Australia online branдs with the digital portfolio of TAB.
If its takeover bid is accepted by Tabcorp, the purchase will have an immediate effect on its position in the market, making it the largest gambling and betting operator on the territory of Australia.
Of course, none of the aforementioned offers could bound Tabcorp to choose one of them and the Australian gambling company could decide to reject all bids if it believes they undermine the actual value of its media and betting business. The company is to consider a possible separation and listing of the assets as independent companies on the Australia Securities Exchange (ASX).
- Author
Olivia Cole
