Entain has not managed to make a groundbreaking offer with its revised AU$3.5-billion bid for the sports betting and media unit of Tabcorp, with the Australian operator remaining open to higher takeover offers and exploring the opportunity to separate the business into two smaller organisations.
Yesterday, Tabcorp confirmed that it had received a revised acquisition offer from the UK gambling giant that had boosted its AU$3-billion offer made at the beginning of February with half a billion. The initial bid of Entain was rejected by the Australian gambling company as too low, with Tabcorp releasing a strategic review of its wagering unit at the time in order to make a decision whether it should consider a sale of the business or another option.
On April 27th, the group revealed that it had not made a decision on the worth of Entain’s new acquisition bid and would consider it in the context of the strategic review that had been previously announced.
Tabcorp investors have been concerned about the performance of the company’s sports betting unit that has been losing ground to online competitors such as Ladbrokes and Sportsbet for more than ten years, since the operator’s AU$11-billion merger with Tatts Group in 2017. The group’s unsatisfactory performance resulted in the resignation of Chair Paula Dwyer in 2020 and the announcement that the CEO David Attenborough would part ways with the company at some point in 2021.
Tabcorp Considers Several Options, Including Demerger of the Betting and Media Arm
Apart from Entain, private equity group Apollo and Lachlan Murdoch have also expressed an interest in taking hold of the betting division of the Australian gambling giant – TAB. The online betting businessman Matthew Tripp has shared he was ready to get involved in a deal, including a demerger scenario or a possible partnership with Fox Corporation.
According to one of the investment directors of Investors Mutual, which currently owns approximately 3% in Tabcorp, explained that the revised takeover offer showed there was interest in the betting business of the company, but on the other hand, the Australian gambling giant was not expected to rush to accept the bid.
The investment director, Anton Tagliaferro, said it is quite unlikely for Tabcorp to remain in its current form in the future and it is a matter of time for the company to maximise value for its shareholders. This could happen through a demerger of the business or a sale.
Yesterday, Entain shared that it revised its all-cash takeover offer represented what it described as “compelling value and certainty” for the shareholders of the Australian gambling giant and was far better in comparison to other alternatives. According to the British gambling operator, it was a strong strategic fit to acquire the TAB business of Tabcorp.
Currently, Tabcorp holds approximately 37% of the Australian betting sector, across both brick-and-mortar and online operations. In comparison, Ladbrokes and Neds brands that are owned by Entain hold an 11% stake. If the two companies combine, the newly-formed entity will have a good advantage in comparison to the other major operator in the local gambling market – Sportsbet – that currently has about 37% o the sector.
- Author
Olivia Cole
