Ladbrokes owner confirms its pursuit of Tabcorp
British gambling giant Entain, the owner of Ladbrokes, has confirmed it is one of the parties that has offered to buy Tabcorp’s wagering and media business.
Shares of the $10 billion Australian wagering and lottery group got a significant boost on Tuesday when the company confirmed it had been approached about potential deals that would split its underperforming wagering business from the lucrative lotteries arm.
In a statement released late Tuesday evening, Entain – which is valued at £7 billion ($12.6 billion) – confirmed it has made a non-binding indicative offer to acquire Tabcorp’s wagering arm and the related media business, which operates most of the TAB operations across Australia.
“Whilst discussions are at an early stage, any transaction would be in-line with Entain’s M&A strategy of expanding across regulated international markets,” the UK firm said.
“As such, this would present an opportunity to acquire an attractive business which, if combined with Entain’s existing Australian business, would create a leading, integrated multi-channel and multi-brand wagering company.”
Tabcorp shares rose as much as 11.7 per cent on Tuesday to a near 12-month high of $4.58 on the potential takeover news, but the company’s board sounded cautious about the prospects of the unsolicited approaches and proposals from multiple parties leading to a transaction.
“The proposals were expressed to be confidential, indicative, non-binding and subject to numerous conditions including due diligence, financing and various regulatory approvals,” Tabcorp said.
“There is no certainty that any transaction will occur. The Tabcorp board is assessing the proposals and Tabcorp will update the market in due course,” it said.
Pressure will be on the board – led by the newly appointed chairman Steven Gregg – to take action.
Investors such as Perpetual, John Wylie’s Tanarra Capital and Investors Mutual were agitating for change last year, which led to the departure of chairwoman Paula Dwyer in December. Tabcorp’s chief executive David Attenborough is due to follow her out the door this year.
Tabcorp investor Sandon Capital has gone further by advocating for a split of the business to deliver value to investors. “It validates our view that there is interest in the business and that market prices previously have not reflected anywhere near its true value,” Sandon Capital managing director Gabriel Radzyminski said.
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Colin Kruger is a business reporter. He joined the Sydney Morning Herald in 1999 as its technology editor. Other roles have included the Herald’s deputy business editor and online business editor.
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Source: Thanks smh.com