British gambling giant Entain has addressed Tabcorp, saying that should the Australian gambling company make a move to spin off its gaming and lottery divisions into stand-alone entities, it will not be successful. The message has been sent to Taborp as part of Entain’s effort to convince the decision-makers at the Australian gambling operator to accept its acquisition offer for the units.
Lately, Tabcorp has found it hard to supports its gaming operations, which definitely raised the interest of a number of companies in a potential takeover deal. Apart from Entain, two other companies – Apollo Global Management and BetMakers – have already made acquisition offers for the gaming assets of Tabcorp. However, for the time being, the Australian gambling giant has not provided any details about a possible decision on the matter. It could reject them all to check whether its gaming and lottery units would be able to survive as separate entities on their own.
Entain, however, seems not to believe this is possible.
As previously reported by Casino Guardian, Entain made its original offer for the purchase of Tabcorp’s wagering and media assets at the end of March, followed by Apollo Global, which also placed a bid. At the time, Tabcorp’s investors did not seem quite impressed with either one of the offers that were made and addressed the UK gambling operator, saying that it would have to make a better offer in case it wanted to be taken seriously.
Tabcorp Could Choose to Spin the Gambling and Media Assets Off as Separate Companies
This attitude of Tabcorp, however, was obviously seen as an opportunity by BetMakers to join the competition for the betting and media assets of the Australian gambling giant. So far, Tabcorp has hinted a few times there is a serious opportunity to reject all takeover bids and list the gambling and lottery units as stand-alone companies on the Australia Securities Exchange.
As mentioned above, Entain believes that such a choice would be a bad move, as Tabcorp would probably lose some of its market share. The CEO of Entain Australia, Dean Shannon, said that the British gambling giant’s acquisition offer provided the shareholders of Tabcorp with certainty. According to Mr Shannon, should Entain takes over Tabcorp’s betting and media arm, it would be able to deliver the promises that have so far been given to shareholders.
Although a third contender – BetMakers – joined the bidding for Tabcorp’s wagering and media assets only days ago, Tabcorp still remained silent on its future plans. It hinted that the takeover bids received so far were not big enough, but it remains unclear whether it is just waiting to see whether new acquisition offers will be made, or it has already decided what it will do with the questionable assets.
Although Entain has been putting a lot of effort to convince the Australian gambling operator that a spin-off of the wagering and media operations would be the wrong thing to do, some market analysts actually believe this might actually be the better choice.
In case Tabcorp decides to sell the assets to another company, gambling regulatory bodies across the country would have to first give their approval to the deal before the actual sale is brought to an end. In case Entain is the one acquiring the assets, competition watchdogs would have to give the green light to the deal, as well, because the British gambling company is currently active in Australia.
- Author
Olivia Cole
