Tabcorp to sell 11.6% stake in Jumbo Interactive
Australian operator to net A$69m profit from lottery operator stake sale as it looks to repay Covid-19-related debts
Tabcorp has agreed to sell its 11.6% stake in online lottery business Jumbo Interactive Ltd for an estimated sale price of A$98m (£54.2m) as the business looks to balance its books amid Covid-19.
Under a block trade agreement with international investment firm UBS, Tabcorp has agreed to sell 7,234,178 shares in Jumbo at a price of $13.52 (£7.35) per share.
“Following the recent extension of our long-standing commercial distribution relationship with Jumbo for a 10-year term to August 2030, there is no longer a strategic rationale for Tabcorp’s shareholding in Jumbo,” Tabcorp CEO and managing director David Attenborough said.
“As a result, we have decided to monetise this investment, with the resulting capital to be used to further strengthen the balance sheet and support the move towards our recently revised target gearing range,” Attenborough added.
The sale is expected to take place today, however no details of interested parties have been confirmed.
Tabcorp has said it expects profits after tax of A$69m (£37.5m) from the sale, which it will use to pay down existing drawn bank debt facilities.
The proceeds will be reported as a significant item in the Australian operator’s H1 2021 financial report.
Tabcorp is expected to write down at least A$1bn (£545m) in value due to the devastating financial impact of Covid-19.
The operator’s full-year 2020 revenue fell by 4.8% year-on-year, punctuated by double-digit declines in its sports betting, digital and gaming services divisions.
Earlier this month, the firm initiated a multi-million-dollar share issue, netting proceeds of more than A$600m from a combination of retail and institutional investors.
Elsewhere, Tabcorp has confirmed the appointment of Janette Kendall to its board as a non-executive director.
Kendall has served in a number of industry-facing roles including as a senior VP of marketing for Galaxy Entertainment Group and an executive general manager of marketing at Crown Resorts.
Tabcorp chairman Paula Dwyer welcomed Kendall to the ASX-listed firm’s board, citing her “deep experience” in marketing gambling companies.
“We look forward to her contribution and complementing the existing skills and experience on the Tabcorp Board,” Dwyer added.