What would happen if Ladbrokes made an offer for Tabcorp to the existing deal with Tatts? Any insights appreciated as I don't know if my guess below is possible..
(1) If the Ladbrokes article is correct and they can buy Tabcorp does that mean Tatts share price goes down a lot and Tabcorp share price rallies?
(2) Did Tabcorp buy 10% of Tatts as a way to negotiate a higher price from Ladbrokes as a way to tell Ladbrokes to stay away?
Ladbrokes weighs up bid for Australian betting giant Tabcorp
Telegraph UK Website
Ladbrokes recently merged with Gala Coral
27 NOVEMBER 2016 • 6:28PM
Ladbrokes Coral is reportedly weighing up a bid for Australia’s largest bookie in a deal that would cost the betting giant more than £2bn.
The company, which completed its
£2.4bn merger only a few weeks ago, has appointed advisers to assess a bid for Tabcorp, the Mail on Sunday reported.
Ladbrokes is not believed to be preparing a statement for the stock market opening on Monday morning, suggesting that any potential bid is in its early stages and not a certainty.
Tabcorp, which runs a network of high-street bookies, electronic games in pubs and clubs, and a handful of pay TV channels, is believed to have been in Ladbrokes’ sites for some years, reportedly turning down a bid in 2013, while its chief executive David Attenborough cut his teeth in the industry at Ladbrokes.
Its hand may have been forced by Tabcorp’s proposed A$6.4bn (£3.8bn) acquisition of fellow bookie Tatts. Ladbrokes is reportedly interested only in Tabcorp, and may have to crash the deal in order to scupper it. The merger between the two Australian companies, meant to ward off growing UK competition in the market, is also expected to face scrutiny from competition regulators, which blocked such a deal 10 years ago.
Tabcorp has a market capitalisation of A$3.9bn (£2.3bn). An acquisition at that price would would create a company worth around £5bn, making it one of the world’s biggest betting groups and catapulting it into the FTSE 100.
Gaming companies have been forced to consolidate in recent years as regulation and tax measures squeeze their margins. Ladbrokes and Gala Coral completed their merger at the start of this month, and Paddy Power and Betfair also merged at the start of this year.
British groups are also looking down under for growth since the deregulation of gambling licences in 2012. Ladbrokes itself has already bought Australian bookmakers Betstar and Bookmaker.com.au, although a deal for Tabcorp would eclipse both.
The company, which offers sports betting as well as Keno, a lottery-style game and owns the Australian Sky Racing channels, had revenues of A$2.2bn last year and pre-tax profits of A$301m.
Ladbrokes Coral did not comment.
