Oct 19 (Reuters) - Tabcorp Holdings Ltd (TAH)
- tabcorp and tatts to combine
- pro forma enterprise value of approximately $11.3 billion , revenue of over $5 billion
- Combined group expected to undertake a $500 million share buyback
- transaction expected to be eps accretive (before significant items) and value accretive for both tabcorp and tatts shareholders
- combined group expected to target a dividend payout ratio of 90% of net profit after tax, before significant items
- completion expected mid-2017 following tatts shareholder
- transaction is unanimously recommended by boards of tabcorp and tatts
- combination expected to deliver at least $130 million of annual ebitda synergies and business improvements
- Deal is expected to result in at least $50 million per annum of additional funding to australian racing industry
- transaction implies a value of $4.34 per tatts share
- combined group expected to target a dividend payout ratio of 90% of npat
- deal in which tatts shareholders will receive 0.80 tabcorp shares plus 42.5 cents cash for each tatts share held
- directors of tabcorp and tatts believe transaction represents compelling opportunity to create significant value for tabcorp and tatts shareholders
- tatts intends to pay its shareholders a fully-franked special dividend of 20 cents per share immediately prior to implementation
- David Attenborough will be managing director and chief executive officer of combined group and damien johnston will be chief financial officer
- Board will be comprised of existing tabcorp board of directors with Paula Dwyer as chairman
- Tatts chairman Harry Boon will join board of combined group as a non-executive director
- Transaction costs are estimated at approximately $90 million.
- Both tabcorp and tatts expect to continue to pay dividends in ordinary course until implementation of transaction
- on completion, existing tabcorp shareholders will own approximately 42% of combined group, tatts shareholders will own approximately 58%
- Under implementation deed tatts is able to pay a special dividend of up to 25 cents per share
- Tabcorp - tatts intends to pay shareholders fully-franked special dividend of 20 cents per share immediately prior to implementation of transaction
- australiansuper, one of tatts' largest shareholders, has indicated that it intends to vote its tatts shares in favour of transaction
