still discussing takeover

Simliar to last article but seems interesting enough for the "experts" to keep on discussing it.

Tabcorp funding issues amid Wesfarmers, NGL speculation CITY BEAT: Michael Bennet

Add to DiggAdd to del.icio.usAdd to FacebookAdd to KwoffAdd to MyspaceAdd to NewsvineWhat are these?TABCORP would need to raise a minimum $150 million to hold their BBB-plus rating should mooted acquisitions in the hotel sector go ahead, an analyst says.

Sources say Tabcorp has been looking at getting into the hotel sector in the last few months due to the uncertainty surrounding the Victorian government’s review of gambling licences to take effect from 2012.

Wesfarmers’ pub business and the debt-laden National Leisure and Gaming have topped the list of suspected targets.

But NAB head of credit research Michael Bush said the company would have to raise at least $150m to acquire both and keep its BBB-plus rating with its gearing at 35 per cent.

Start of sidebar. Skip to end of sidebar.
.End of sidebar. Return to start of sidebar.
"When their gearing was up at around over 43 per cent they had a triple BBB flat rating,” he said.

"They’re rated BBB plus at the moment and on our metrics they’re sailing pretty close to the wind on that one.”

NLG has been hush hush since last week when it said it has been approached “from time to time”, but that none have been sufficiently developed to warrant disclosure.

Mr Bush said the acquisition of both assets would set Tabcorp back between $400m to $500m.

"Absolutely they’d need to raise some capital because that stacks up to an enterprise value of $400 to $500m and that’s going to stretch them,” he said.

NLG ‘s suite of assets includes 38 leasehold hotels in Queensland and New South Wales, which incorporates about 1000 electronic gaming machines.

Wesfarmers shares rose almost 2 per cent today to $29.73 as the broader market fell about 1.3 per cent. NLG shares also rose 3.3 per cent whilst Tabcorp slipped about 2 per cent to $7.18.

[email protected]