Tabcorp, Tatts Group confirm merger plan

Australian gambling operators Tabcorp Holdings and Tatts Group have confirmed plans to form a betting behemoth with combined annual revenue of over AUD 5b (US $3.8b).

After suspending trading in their respective shares on Tuesday, the two companies issued statements on Wednesday saying each of their respective boards had unanimously recommended sealing the deal, which combines Tabcorp’s wagering strength with Tatts’ leading lottery operations.

The deal, which expects to be complete by mid-2017, will be implemented via a Tatts Scheme of Arrangement that will see Tatts shareholders receive 0.8 Tabcorp shares plus 42.5¢ cash for each Tatts share. The price represents an 18.4% premium to the one-month average price of Tatts shares. Tatts shareholders will control 58% of the enlarged entity, with Tabcorp’s shareholders holding the remaining 42%.

The new entity’s board will be comprised of Tabcorp’s current board of directors and current Tabcorp chair Paula Dwyer will remain chair of the enlarged entity. Current Tabcorp CEO David Attenborough will continue as CEO of the new company. Tatts chairman Harry Boon will join the new board as non-executive director.