Tabcorp and Tatts merger talks back on

Aust

horceracegeneric2
ralian business news sources are speculating whether a merger between leading gambling operators’ Tabcorp Plc and Tatts Group could be revived as pressure from wagering competitors intensifies.

Australia’s two largest non-casino gambling firms are rumoured to be in talks to create a A$9.34bn betting industry giant to fend off popular overseas online rivals such as William Hill, Ladbrokes and bet365, that are gradually taking market share in Australia.

This is not the first time the operators have engaged in merger discussions. In November 2015, the two wagering giants called off discussions regarding a potential nil-premium merger after failing to reach a deal. Since then Tabcorp’s shares have gained 11.4% while Tatts has fallen by the same amount.

Shares in the two companies were placed in a trading halt on Tuesday morning until market opens on Wednesday “pending an announcement in relation to a potential change of control transaction... that is under consideration”.

Matthew Felsman, a wealth adviser at AAP Securities commented: “The entry of large global operators such as William Hill and Sportsbet could have helped push a deal across the line as they have taken a sizeable slice of the local wagering market.”

Industry commentators are alluding towards a merger of equals, with Australian business analysts predicting favourable merger conditions to be set by the Australian Competition & Consumer Commission (ACCC). Australia’s competition regulator said it would scrutinize the proposal, citing “a range of potential issues and areas of overlap”.

The wagering giants reported a combined profit of A$403m for the 2015/16 financial year. Mathan Somasundaram, analyst at stockbroker Baillieu Holst stated: “They are probably both running out of growth, so put them together and they probably could do savings and on aggregate they might pull out a double-digit growth number.”

Shares in the two companies are expected to resume trading on Wednesday or following the announcement of a transaction.
Premium+ Connections
 
Premium

1xBet Partners

 
Premium

Lynon

 
Premium

GammaStack

 
Premium

RISK

 
Premium

PIN-UP Partners

 
Premium

Galaxsys

 
Premium

Sport Generate

 
Premium

Revsharks

 
Premium

Imagine Live

 
Premium

Digitain

 
Premium Connections
Consultancy

SCCG Management

Executive Profiles
Zeal Network SE

Stefan Tweraser

VIP Play

Les Ottolenghi

Scientific Games

Keshav Pitani

Social & App

Spribe CEO exclusive: Simplicity is the foundation

Spribe CEO David Natroshvili speaks to Gambling Insider abou...

Redefining iGaming: A history of crash games

Crash games is a growing vertical that has taken gambling by...

A certain something: What makes crash games special?

Crash games. They’re simple, they’re easy to learn and,...

Smarter innovation to shape the future

Spribe CCO Giorgi Tsutskiridze discusses the past, present a...

Facing Facts: The corner of quarterly contemplation

With Q1 reports out across the industry, Gambling Insider co...

Taking Stock: A guide to key stock prices across the industry

Gambling Insider tracks prices from some of the industry’s...

15 years of Gambling Insider: From the Founders

Over the last 15 years, Gambling Insider magazine has interv...

15 years of Gambling Insider: The Awards over time

Global Gaming Awards Event Manager Mariya Savova gives us he...