Entain first to bat with AUS $3bn cash-offer for TAB

By | February 17, 2021

Entain Plc has emerged as the first suitor to disclose its interest in acquiring Tabcorp Holdings’ TAB racing and sports betting unit, tabling an AUS $3 billion (£1.9 bn) all-cash offer to take control of the underperforming business.

The FTSE100 firm’s cash offer represents, it said, the ‘market valuation’ placed by ASX analysts on Tabcorp’s wagering unit.  

The Australian Financial Review (AFR.com) reported, however, that Entain’s opening offer will likely be rejected by Tabcorp, which pursues a minimum valuation of AUS $3.5 billion (€2.15 bn) for TAB which maintains a number of exclusive wagering rights within Australia’s six states.

The focus remains on Tabcorp’s company board led by new chairman Steven Gregg, which has yet to decide whether the firm will split its assets two years on from its AUS $11 billion merger with main market rival Tatts Group.

The cumbersome merger has failed to deliver value for investors as well as seeing Tabcorp circled by competitors and private equity funds seeking to acquire its offcuts. 

Straight to bat with its all-cash offer, Entain aims to merge TAB units with its Australian online portfolio of Neds, Ladbrokes and Bookmaker AUS brands – displacing FTSE rival Flutter Plc’s Sportsbet brand as online market leader.

However, all TAB suitors have been warned that a deal will carry significant due diligence by the Australian Competition and Consumer Commission (ACCC) as the winning party will have to secure TAB horse racing funding duties and retail network rights across Australia’s six states, maintaining individual gambling laws.

A decision on whether TAB will be sold is expected imminently as Tabcorp Holdings prepares to announce its 2020/2021 Interim results on Wednesday 17 February.  

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