nsortium including private equity firm KKR, Morgan Stanley Infrastructure and Macquaire Group Ltd has offered up to A$7.3bn to buy Australian lottery operator Tatts Group, threatening a takeover deal with Tabcorp Holdings Ltd.

The proposed deal is worth between A$4.40 and A$5 per Tatts share, with the group planning to either sell or separately list Tatts’ betting and gaming business.

In a statement, Tatts said it has yet to form a view on how the proposal compares with the Tabcorp offer that is currently valued around A$6.03bn. However, it has been reported that two Tatts shareholders believe the new offer is a superior deal and could spark a bidding war with the entry of additional players.

In October, Tabcorp agreed to acquire Brisbane-based Tatts to form a gambling powerhouse in the hopes of fending off the increasing number of competitors from overseas online rivals. Nontheless, this deal is uncertain after the recent offering from the Pacific Consortium.

Charlie Green, director at Hunter Green Institutional Broking, which owns Tatts shares says: “The value of the lotteries business is starting to be recognised, it is not undeniably game-on in terms of an auction.”

Managing director of activist investor Sandon Capital, which also owns Tatts shares, says that whilst the latest offer is a considerable improvement on Tabcorp’s, it’s unlikely to be the last

News of the proposed consortium offer sent shares in Tatts soaring by 8.5%, ending Tuesday at its highest level since 2007.