Tabcorp Divests Pokies Business To Smooth Way For Merger
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So much for the hairy chested suggestion last month from Tabcorp (TAH) that it would run off to the Australian Competition Tribunal to try and by pass that nasty Australian Competition and Consumer Commission which wants the company to sell off its Queensland poker machine monitory business as a condition before approving the $11 billion merger with rival gaming group, Tatts (TTS).
Tabcorp has agreed a deal to offload its Queensland gaming machine monitoring business to smooth its $11 billion merger with Tatts.
The gaming giant will divest Odyssey Gaming Services to Australian National Hotels - a subsidiary of the privately-owned Federal Group - to address the Australian Competition and Consumer Commission’s concerns that the Tatts merger would lead to a lack of competition in Queensland pokies.
No real mention of the Australian Competition Tribunal move, except as a background threat if the ACCC doesn’t give the deal authorisation.
“The agreements are conditional upon the Australian Competition and Consumer Commission accepting an undertaking to be provided by Tabcorp or the Australian Competition Tribunal otherwise granting authorisation for the proposed combination and the proposed combination becoming effective,” the gaming giant said. Tabcorp shares were down 1%, at the close at $4.73.
The Australian reported this morning that US private equity firm Kohlberg Kravis Roberts and others have offered a fresh $7.3 billion bid for Tatts Group to rival Tabcorp’s merger offer.
The offer equates to $4.21 per share and was at a 5% premium to the average share price over three months, but it is at a big discount to Tatts’ closing share price yesterday of $4.35.
“The KKR consortium, known as the Pacific Consortium, includes Macquarie Group, Morgan Stanley Infrastructure and First State, and initially put forward a proposal to buy the Tatts lotteries business last year and float its wagering arm." The Australian claims the bid doesn’t need the approval of the competition regulator, the ACCC.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.