Pacific Consortium abandons Tatts Group takeover
Transatlantic private equity firm Pacific Consortium have withdrawn their proposed takeover bid for Australian gambling operator Tatts Group.
The withdrawal follows the Tatts board’s decision to deny Pacific access to its data room, a vital part of the corporate due diligence process required as part of the takeover.
Under the terms of the proposed Tatts merger with Tabcorp, the company can bar access to its due diligence if its governance deems that a submitted bid is not in the interests of its shareholders. After an extensive financial review of the Pacific bid, Tatts ruled against allowing access.
In a statement concerning the decision, Tatts governance said “Tatts’ board has determined that the revised indicative proposal is not a superior offer and cannot reasonably be expected to result in a superior proposal when compared to the proposed Tabcorp merger. In these circumstances, Tatts is unable to provide due diligence or engage with the Pacific Consortium”.
Pacific Consortium made its initial AUS$7.3bn bid to take over Tatts after a proposed $11bn takeover deal by rival firm Tabcorp made in November 2016 had stalled due to long term scrutiny by Australian competition authorities.
This initial bid was rejected by Tatts governance, which prompted Pacific to submit a second all-cash takeover bid at $4.21 per share. The second bid included an offer of additional dividends to shareholders, should they decide to proceed with the Pacific takeover plan.
In an interview with The Australian Business Review, Pacific Consortium Chairman Kerry Schott said: “This is certainly a very disappointing day for Tatts shareholders. Given the current approach of the Tatts board the consortium does not intend to undertake further work on its proposal.”
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