Apollo outflanks Entain with fresh A$4bn Tabcorp bid

The race for Tabcorp’s highly coveted wagering and media division took another turn today as Apollo Global Management submitted a competing A$3.5bn (£1.9bn) bid for the business arm. Acknowledging the offer, Tabcorp also revealed a second separate proposal from the US investment fund, which includes the addition of Tabcorp’s gaming services division to any takeover for a further A$500m, a proposal that if accepted would see the takeover bid rise to A$4bn. Tabcorp’s gaming services division includes services provided to venues-based operators such as maintenance of so-called “pokie” retail poker machines, as well as the MAX Regulatory Services business. “The revised proposal is subject to numerous conditions including due diligence, arranging financing, receipt of all relevant regulatory approvals and obtaining various third-party approvals and consents,” Tabcorp said. “The Tabcorp board has not yet formed a view on the merits of the revised proposal and will assess it in the context of the previously announced strategic review.” In April, Entain submitted a second bid of A$3.5bn solely for the wagering and media division after making an initial A$3bn offer in March. These are the only bids to have been acknowledged by Tabcorp, although there is understood to also be interest from former BetEasy CEO Matt Tripp and Lachlan Murdoch’s Fox Corp. Tabcorp’s strategic review has the stated objective of “assessing and evaluating” all structural and ownership options, with the aim of maximising value for the firm’s shareholders. This includes the potential sale of the wagering and media business to a third party or a potential demerger, which could be implemented via a separation of the division, leaving the main Tabcorp group to focus on the core lotteries and keno business. Tabcorp is also continuing a strategic review of the gaming services business. In its Q1 2021 financial results, Apollo Global Management reported total assets under management of $461.1bn (£331.3bn), as well as $49.7bn in so-called dry powder funds, which are available for investment. Apollo has made several strategic investments into gambling-related businesses over the past year, with operators including Sazka Group and Great Canadian Gaming Corporation. The firm was beaten to the acquisition of William Hill by Caesars Entertainment in November 2020. However, Apollo is understood to be eyeing a fresh bid for William Hill’s non-US assets after Caesars declared its intention to sell. Earlier this week, Apollo made a $5bn investment in Yahoo parent company Verizon Media, with speculation rife that it could launch Yahoo Sports into sports betting and online gaming.