A new bidder for Tabcorp’s wagering and media division has appeared, making a proposal of AU$4 billion. The new offer came from the private equity company Apollo Global Management. One of the conditions of the offer requires Tabcorp to transfer its gaming services assets along with the wagering and media division.
Provided Tabcorp refuses to sell its gaming services division, Apollo’s offer is for an AU$3.5 billion acquisition. This is still a much higher offer, compared to the bid of AU$3 billion made in February. The giant Australian gaming company announced that it will still review its gaming and wagering business and will not make any hasty decisions despite the generous offer. The newest bid of AU$3.5 billion made by Apollo matches Entain’s offer made last month.
The gaming services arm of Tabcorp is currently not a part of the sale offer but Apollo’s record offer of AU$4 billion is earmarked for the acquisition of both the wagering and media and the gaming services divisions. The interest in the gaming service arm is understandable as Tabcorp is currently Australia’s biggest provider of gaming machine monitoring services. Before the company’s board of directors approve of Apollo’s proposal, it is yet to meet various conditions such as due diligence, financing, obtaining approval by regulatory bodies and third parties.
Meanwhile, last year Tabcorp launched a strategic review of its gaming services arm after a huge drop in revenue. Although the Australian gaming company announced that it will consider Apollo’s offer, it ensured that it will continue with its strategic review.
The sale of the wagering and media division of Tabcorp was announced in February by the company’s chairman Steven Gregg. After a strategic review, he announced three variants of action: selling the wagering division of the company, demerger of the wagering arm, or demerger of the lottery business of Tabcorp.
Apollo and Entain Race for Tabcorp’s Wagering and Media Assets
In September last year, Apollo made a bid for William Hill’s acquisition but it recently lost to Caesars Entertainment. In November, however, it signed a €500 million deal for investment in Sazka Group and KKGG. Apollo also acquired the gaming company Great Canadian Gaming Corporation for more than CA$3.3 billion.
As Apollo Global Management is well-experienced in global gaming investments, it comes as no surprise that the company is interested in Tabcorp’s assets. If Apollo manages to acquire Tabcorp’s wagering and gaming services divisions, it will be able to expand its presence in both the Australian and global gaming market.
In April, Apollo’s current rival, Entain, proposed a higher bid, upping the previous offer of AU$3 billion to AU$3.5 billion. Owning brands like Ladbrokes, Sportingbet, and a number of other bookmakers, Entain also has the advantage of the breadth of experience in the gaming industry. Entain’s offer is yet to be accepted by Tabcorp’s board of directors as some members insisted on going through with the strategic review before accepting the bid.
- Author
Olivia Cole
