Australian gaming giant Tabcorp has announced that it is to unload its 11.6 percent interest in Jumbo Interactive online lottery organisation via a subsidiary.
In a media statement, the company claimed that after an extension of a long-term commercial distribution relationship with the company, it no longer saw ‘a strategic rationale’ for maintaining the shareholding.
Tabcorp has agreed to sell 7,234,178 shares in Jumbo at a price of AU$13.52 per share, for gross proceeds of AU$97.8 million, under an underwritten block trade agreement with UBS. Settlement of the sale is anticipated to take place today (24 September 2020).
The Melbourne-based company says the proceeds will be used to pay down existing debt facilities drawn from banks.
Tabcorp will record a sales profit of approximately AU$69 million after tax, which is expected to be reported as an important item as part of the financial performance of the company for the first half of next year.
David Attenborough, the managing director and CEO of Tabcorp, explained: “Following the recent extension of our long-standing commercial distribution relationship with Jumbo for a ten year term to August 2030, there is no longer a strategic rationale for Tabcorp’s shareholding in Jumbo.
“As a result, we have decided to monetise this investment, with the resulting capital to be used to further strengthen the balance sheet and support the move towards our recently revised target gearing range.”
In addition, Tabcorp announced that Janette Kendall would join the group as a non-executive director, subject to the required regulatory and ministerial approvals being received.
Kendall has served in various senior management roles during her executive career, including as Senior Vice President of Marketing at Galaxy Entertainment Group in China and Executive General Marketing Manager at Crown Resorts.
Chairperson Paula Dwyer of Tabcorp noted: “We welcome Janette Kendall to the Tabcorp Board. Ms Kendall is a highly experienced director who brings deep experience in the gambling entertainment industry, digital innovation, and marketing. We look forward to her contribution and complementing the existing skills and experience on the Tabcorp Board.”