According to the market the chances have improved for UK punting giant Entain to grab control of Tabcorp’s bookmaking and media division thanks to sweetening its original $3 billion offer with an additional $500 million.
But it remains just a chance, not a certainty, though Tabcorp shares rose 4.1% to $5 on the news of the upgraded offer by the UK group. That’s close to the high for the year of $5.06.
That suggests the price is now in the region of what investors think the business is worth.
With a couple of other possible parties sniffing around, it is possible Tabcorp might get an auction going that would lift the potential price to a level that would make it impossible to knock back.
Tabcorp though was playing its cards very close to the its chest.
In a statement to the ASX on Tuesday morning Tabcorp it had not yet formed a view on the merits of the new price from Entain, which owns the rival online bookies Ladbrokes and Neds.
Tabcorp had earlier rejected the $3 billion offer, but some market analysts reckon the new price is getting close to what Tabcorp wants.
In rejecting the first Entain offer in February as too low Tabcorp launched a strategic review into the future of its wagering business to consider whether it should look to sell the unit or demerge it from its lotteries operation.
Tabcorp said on Tuesday that it would assess the new bid “in the context of the previously announced strategic review”.
There was no update on the timing of that review.
“As stated, the objective of the strategic review is to assess and evaluate all structural and ownership options to maximise the value of Tabcorp’s businesses for the benefit of shareholders,” the company said.
Private equity group Apollo and media heir Lachlan Murdoch have also expressed interest in Tabcorp’s TAB wagering division, which remains the largest bookie in the country but continues to lose ground to online rivals such as Sportsbet and Ladbrokes for over a decade.
The extra half a billion offered by Entain is also a handy signal to the likes of Apollo and Murdoch that the eventual winning price will be a lot more than they had originally envisaged – a sort of warning shot.
