Entain Increases Tabcorp Bid to A$3.5bn
Entain has made an improved offer to purchase Tabcorp’s wagering and media division. The improved bid, which the board has not yet accepted, has been increased by A$500m to A$3.5bn.
Entain has tabled a new offer to buy Australian operator Tabcorp’s wagering and media division.
The Financial Times Stock Exchange-listed operator has improved its initial offer by A$500m and states that the new bid is compelling for Tabcorp shareholders due to the amount of cash on offer and in terms of certainty and deliverability.
Entain said in a statement: “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,”
The Tabcorp board has acknowledged the new bid from Entain but has admitted that they have not yet made a decision and are keeping all options open.
“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,” the operator said.
In February this year, Entain submitted its first bid of £1.6bn (A$3bn) for the company’s wagering and media division. An offer that CFO Rob Wood said would be “absolutely transformational” for Entain’s Australian market share.
It was a bid that Tabcorp rejected after admitting that they had received “several unsolicited approaches” from interested parties, one of which is believed to be private equity company Apollo Global Management.
Apollo Global Management was founded in 1990 by Leon Black after the collapse of Drexel Burnham Lambert. Black was the former head of Drexel’s mergers and acquisitions department. Apollo was founded to make investments in distressed companies, which has been profitable for the company. Apollo has total declared assets of $8.542bn (2019), with revenue figures of $2.931bn, of which $1.407 is income.
In a statement on Tabcorp’s website authorised by the board, it states: “The objective of the strategic review is to assess and evaluate all structural and ownership options to maximise the value of Tabcorp’s businesses for the benefit of shareholders. These options may include a potential sale of the Wagering & Media business to a third party or a potential demerger of either the Wagering & Media business or the Lotteries & Keno business.”
Although Entain has returned with an improved offer, industry insiders have shed doubt that this offer will be accepted. If the company demerges the wagering and media division and list it as a separate company, many believe it would be worth more than the A$3.5bn bid on the table.
Other interested parties are believed to be Ex-BetEasy CEO Matt Tripp and Fox Corp.
Matt Tripp has taken a new role as a strategic adviser to software and data group BetMakers. He has publicly stated that his new role would not preclude him from playing a role in the sale of Tabcorp’s wagering business. He added that the strength of BetMaker’s technology could see them form a partnership with Tabcorp, whoever ultimately takes control.
Lachlan Murdoch, the Fox Corp. CEO and executive chairman is also believed to be interested. However, Murdoch currently has to deal with the fall-out from its Fox News Channel.
The network has been forced to answer allegations that it ‘hosted and amplified’ false news of a conspiracy to rig the 2020 American general election. The broadcaster has been hit with two new defamation lawsuits from election machine makers and software companies who are seeking $4.3 billion.