Entain doubles back with A$3.5bn Tabcorp offer
Board of Australian operator has “not yet formed a view” on revised bid as it weighs up wagering division demerger
Entain has made an improved bid of A$3.5bn (£1.9bn) for Tabcorp’s wagering and media division.
The FTSE 100 operator suggested its second bid, upped by around A$500m, was compelling in terms of the value it represents for Tabcorp shareholders in both cash and the certainty of deliverability.
“The proposed transaction would be in line with Entain’s current M&A strategy, and presents an opportunity to acquire an attractive business which, when combined with Entain’s existing Australian business, would create a leading, integrated multi-channel and multi-brand wagering company,” Entain said in a statement.
Tabcorp acknowledged Entain’s improved offer but admitted it was still considering all of the options available.
“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,” Tabcorp said.
Entain first submitted a A$3bn (£1.6bn) bid for the operator’s wagering and media division in February, when CFO Rob Wood claimed a deal would be “absolutely transformational” for the group’s Australian market share.
This initial offer was rejected by Tabcorp, which said it had received “several unsolicited approaches” from potential bidders, which are thought to include private equity giant Apollo Global Management.
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.
EGR understands the most likely outcome at present would see Tabcorp demerge the wagering and media division and list it as a separate business. Some shareholders believe this would value the betting arm at more than the A$3.5bn offered by Entain.
This solution would also be more straight forward in terms of gaining state-wide regulatory approval.
Ex-BetEasy CEO Matt Tripp is another potential suitor, while Lachlan Murdoch’s Fox Corp is also thought to be interested in pursuing a deal.