Entain Makes Offer for Tabcorp Holdings Ltd Acquisition

Entain Plc made a non-binding offer for the wagering and media division of Australia’s largest gambling company, Tabcorp Holdings Ltd.

Entain possibly aims to combine its existing Australian business with Tabcorp Holding but those discussions are at an early stage, according to the company’s representatives.

Tabcorp stated that Entain’s offer will have competition since in the recent weeks the Australian company reported receiving “a number of unsolicited approaches and proposals”.

The deal is important for the London-listed owner of the Ladbrokes betting chain for it will strengthen the company’s positions in the region.

Tabcorp’s Biggest Division

The Australian company’s biggest division is Wagering & Media after the Lotteries & Keno business. In the summer of 2020, Tabcorp earned A$5.22 billion ($3.98 billion) from Wagering & Media, which is 40% of company’s revenue.

David Brohan, Goodbody analyst said in a note to clients: “Given the consolidated nature of the Australian market, there are limited such opportunities left to look at”.

He added: “Assuming any deal is completed at the right price we can see positives from a transaction.”

Entain made a statement in response to speculation of a future merger with Tabcorp Holdings. It confirmed making an offer to the Australian company to acquire its Wagering and Media business.

According to the statement, the discussions are at an early stage, so nothing can be confirmed at this point but the British company said that the potential deal would be in-line with its current M&A strategy of expanding across regulated international markets.

If the merger is successful, Tabcorp would be part of Entain’s existing Australian business to create leading, integrated, multi-channel and multi-brand wagering company.

After the news broke, Tabcorp shares jumped 9% in Sidney trading on Tuesday, valuing the company at A$9.9 billion.

In November last year the Australian company had to face a significant fine over violation of New South Wales gambling law. The loss was significant and the benefits from the future Entain deal will compensate for that.

In the meantime, Entain refused a from MGM Resort. The explanations from the gambling powerhouse was that the offer significantly undervalued the company.

Even after MGM decided to include both cash and shares in its offer, Entain still refused.

After several attempts to acquire the British brand, MGM announced last month that it is no longer interested in the future merger that was supposed to benefit the both companies.

Source: “Entain in Talks to Buy Betting Business of Australia’s Tabcorp”, Bloomberg, February 2, 2021