Tabcorp Rejects Takeover Bids & Demerges Parts Of Business

Tabcorp, Australia’s largest gambling company has said that it rejects all current bids for a takeover of the company however the Chairman told reporters it is still open to higher bids for a takeover but the current offers including that from Entain “weren’t compelling enough.”

At the same time as announcing the rejected offers the company also said that after a review of its business Tabcorp will demerge its Lotteries and Keno businesses.

Tabcorp chairman Steven Gregg said: “Following a thorough and rigorous assessment of all relevant structural and ownership options, the Tabcorp Board of Directors has concluded that a demerger of the Lotteries and Keno business is the optimal and most certain path to maximize value for Tabcorp shareholders.2 He went on to say, “The foundations have been laid for Lotteries & KenoCo and Wagering & GamingCo to deliver long-term growth. The Tabcorp and Tatts integration has set up both businesses to benefit from enhanced scale and diversification.”

Entain in response said it was “disappointed” with the news on the split of Lotteries and Keno from Tabcorp, indeed observers believe that the demerger would protect and value Tabcorp higher given the separation. It would also make any takeover more complex as the separate entities could be seen as more valuable and would have to seek approval from two independent shareholders.

No timeframe by Mr Gregg on the demerger was announced, however with the announcement of the demerger could prompt interested parties to up their valuation of Tabcorp prior to any removal of the Lotteries and Keno business.