UK betting giant Ladbrokes Coral has been reported to be approaching the largest bookmaker in Australia with a takeover bid that could cost the company over £2 billion. Although Ladbrokes Coral itself has completed a merger deal estimated to about £2.4 billion only a few weeks ago, the company has hired advisers to help it assess a suitable takeover offer for Tabcorp.
The deal could come as part of the UK-based company’s strategy to further expand its reach and consolidate its presence on the global regulated markets.
At the beginning of November, Ladbrokes and Gala Coral finally managed to complete their long-awaited merger. On the other hand, Tabcorp currently runs a entire network of bookmaking companies and electronic games located in clubs and pubs, as well as a number of pay TV channels. The Australia-based company has been considered as one of the potential acquisition targets for Ladbrokes for quite some time now. It has even been reported to have turned down a takeover offer back in 2013.
The Ladbrokes approach towards Tabcorp may have been pushed by the fact that the latter has proposed to acquire its fellow bookmaking company Tatts for a total of £3.8 billion. Ladbrokes Coral, however has been reported to be interested in Tabcorp only, so the company may be forced to give up from the deal. On the other hand, if the two Australian companies merge successfully, the competition for Ladbrokes Coral on a global scale would increase immensely. In addition, an eventual takeover of Tabcorp would mean that the UK company would face strict monitoring and control from competition regulatory authorities, which blocked such a deal a decade ago.
Currently, the market share of Tabcorp is estimated to a total of £2.3 billion. So, an eventual takeover deal would result in creating a company with a market value of around £5 billion, which basically means it would be one of the largest bookmakers on a global scale.
Over the last few years, a great deal of gaming companies have become oriented towards mergers and acquisitions to consolidate their presence in the market over the last few years. This trend has been mostly initiated by the fact that regulatory authorities are aimed at imposing strict control over gambling operators, while taxes and competition also increase. Apart from Ladbrokes and Gala Coral that completed their merger at the beginning of November, Paddy Power and Betfair also joined forces in 2016.
In addition, this is not the first time when UK-based betting company is demonstrating its interest towards Australian companies. Ladbrokes itself has acquired Australia-based Betstar and Bookmaker.com.au, but an eventual deal with Tabcorp would be a large step for the company.
- Author
Olivia Cole
