The largest gambling operator in Australia, Tabcorp, has shared that it decided to remain open for new takeover offers for its betting unit after rejecting a number of earlier offers and confirming a plan to spin off its lotteries business.
The beginning of the week saw the gambling group unveil the results of a recently completed strategic review of its business, as well as a decision to turn down the offers for its TAB wagering division that it has received so far from the private equity firm Apollo Global Management, the UK gambling giant Entain and the betting technology group BetMakers.
Steven Gregg, chairman of Tabcorp, said that the offers were not found compelling enough. He also explained that the Australian gambling operator would consider a larger acquisition bid. He further noted that the group was also considering other options for its media and betting arms, while separating the lotteries and keno units from Tabcorp and creating two independent companies listed on the Australian Stock Exchange (ASX).
Besides, the Australian gambling giant revealed that it was discussing options for establishing joint ventures involving the assets in international markets with BetMakers, which has been one of the TAB suitors.
Lotteries and Keno Units Remain Strong amid TAB Assets-Related Uncertainty
As previously reported by Casino Guardian, any potential sale of the TAB betting business would require a large number of approvals from competent regulatory bodies, the government and some shareholders in the racing industry. Mr Gregg has also explained that getting all the necessary approvals would be a long and complicated process that risked further delay and was leading to an uncertain outcome.
For now, the fate of the betting and media arm of the Australian gambling giant remains unknown. Tabcorp’s failure to provide due diligence to Entain although the British gambling giant previously boosted its takeover bid from AU$3 billion to AU$3.5 billion has raised some questions among the rivals regarding the company’s commitment to maximising shareholder value.
Following the announcement made by Tabcorp on July 5th, Entain shared that it saw no reason to raise its proposal. A spokesman of the British gambling company said that that the AU$3.5-billion all-cash takeover of Entain had offered compelling value for Tabcorp’s shareholders, especially considering the various structural and technical challenges that were being faced by the Australian gambling giant’s wagering arm.
Some of Tabcorp’s shareholders have been calling for the company’s executives to start depending more on its strong lotteries and keno businesses, and to consider unwinding its merger with its once local rival Tatts Group. According to these investors, it would be better for the company to get rid of its bookmaking division that has been losing share to online competitors such as Ladbrokes and Sportsbet.
The spin-off of Tabcorp’s lotteries business, which has been considered a reliable and profitable division, is set to be finalised by the end of June 2022. The gambling giant also projected that the separation costs would be worth as much as AU$275 million.
- Author
Olivia Cole
