Entain has updated its offer for Tabcorp Holdings’ TAB unit, now offering AUS $3.5 billion (€2.2 billion) for the ASX gaming group’s wagering and media division.
The FTSE100 firm aims to become ‘Australia’s leading multi-channel and multi-brand gambling group,’ up from its initial bid of AUS $3 billion proposed on February 2, which was deemed ‘grossly undervalued’ by the Tabcorp Holdings board.
A statement from Entain read: “Entain believes that the Revised Proposal is compelling both in terms of the value it represents for Tabcorp shareholders in cash, and certainty of deliverability.”
Currently, Entain is the only company that has publicly proposed an offer to buy TAB, though other interested parties have been rumoured.
Tabcorp’s wagering units have struggled year on year against increased competition from online rivals, despite gaining full ownership of Australian retail betting in 2017 after a AU$11 billion merger with rival Tatts Group. The underperforming wagering arm will be divided from its lotteries equivalent in a future deal.
Last month, Tabcorp’s new Chairman, Steven Gregg, approved a strategic analysis of the company to evaluate all corporate options. The review’s top priorities were emphasised as the sale of TAB and the possible demerger of Tatts lottery and keno unit.
Better-than-expected interim results
Gregg stressed, however, that the Tabcorp board of directors had no predetermined outcomes in regards to the company’s selling options because Tabcorp had achieved better-than-expected interim results.
Tabcorp has been aware of Entain’s interest since February of this year, and has stated that any deal will be in line with the company’s current M&A strategy of expanding into controlled international markets.
The company also stated that the ‘attractive business proposition’ presented itself as an opportunity to combine its current Sportingbet franchise with Tabcorp properties.