TABCORP SELLS ODYSSEY TO TASSIE’S ANH AS PACIFIC CONSORTIUM SWEETENS TATTS OFFER
In a bid to win approval from the competition watchdog for its planned $11 billion Tatts merger, Tabcorp has sold off its Queensland gaming machine monitoring business.
The gaming giant will divest Odyssey Gaming Services to Australian National Hotels to address the Australian Competition and Consumer Commission’s concerns that the Tatts merger would lead to a lack of competition, especially in the Queensland market.
Tabcorp only gained control of Odyssey last year when it spent around $130 million in buying Intecq.
Odyssey has been acquired by Australian National Hotels, a subsidiary of the privately-owned Federal Group, which operates significant tourism, hospitality, retail, casino and gaming assets in Tasmania including Wrest Point, Country Club Tasmania, Saffire Freycinet, The Henry Jones Art Hotel, Vantage Group and Network Games.
PACIFIC CONSORTIUM SWEETENS OFFER BUT TABCORP STILL “BEST BET” FOR TATTS
Private equity group Pacific Consortium has sweetened its offer for the proposed takeover of Tatts Group, making an all-cash bid that values the Brisbane-based group at $7.2 billion.
Pacific Consortium, backed by US private equity titan Kohlberg Kravis Roberts, has upped its offer to buy Tatts in an all-cash bid
Pacific, which includes Morgan Stanley, Macquarie Group and First State Super and which is also backed by US private equity titan Kohlberg Kravis Roberts pitched its revised bid late last Tuesday evening.
The new offer of $4.21 a share effectively matches what Tabcorp values Tatts at in its cash-and-scrip proposal, but both are below the market price for shares in the lottery operator.
James Lawrence, an analyst at stockbroker Morgans, said he did not expect Pacific’s latest effort to be its final offer. But it should be enough for the consortium to get its foot in the door to conduct due diligence and get a better understanding of its target, Mr Lawrence said.
“Whether it is their final bid, I don’t think so,” he told Business Daily. “But whatever they put on the table must be compelling enough for investors to give up the substantial synergies that will be derived by the combined Tatts-Tabcorp group.”
One of Tatts Group’s shareholders, Sandon Capital, which previously argued the lotteries business has been undervalued in the Tabcorp offer, and said according to the Australian Financial Review, that the latest bid would put pressure on the Tatts board to open its books to the Pacific Consortium in the absence of a higher offer. “This looks like it is clearly designed to get the board to give them due diligence. We now have the beginning of a bidding war,” said Sandon’s managing director, Gabriel Radzyminski.
Tatts said that its directors continue to recommend the merger proposal with Tabcorp in the absence of a superior proposal and subject to an independent expert’s assessment.
Sources: The Australian, AFR, skynews.com, agbrief.com, Business Daily
Feature image: Tabcorp CEO David Attenborough, Pic: Stuart McEvoy
