(Adds details of Tatts response, changes slug) SYDNEY, Dec 23...

(Adds details of Tatts response, changes slug)

SYDNEY, Dec 23 (Reuters) - Australia's Tatts (TTS) on Friday rejected a takeover bid worth up to A$7.3 billion ($5.27 billion) from a consortium backed by KKR and Macquarie Group (MQG), saying it preferred an earlier offer from Tabcorp Holdings Ltd (TAH).

Tatts said the proposal from the Pacific Consortium of four financial investors relied on assumptions that were either incorrect, inconsistent with Tatt's current expectations or unknown.

The consortium offered A$3.40 per share cash for the lotteries business and shares in a spinoff wagering company it values at A$1 to A$1.60 a share, according to Tatts.

Tatts said the consortium had assumed the operating result in its lotteries business would be A$353.6 million in the current financial year, which was likely to be too high based on its first-half unaudited result of A$153 million.

The estimated value of the wagering business also was not realistic, which meant shareholders would not receive A$1 to A$1.60 of value for that portion of the company.

As a result of its analysis, Tatts said it would not grant the Pacific Consortium due diligence or otherwise engage in talks about its proposal.

Several Tatts shareholders told Reuters earlier this month they believed the consortium's offer beat Tabcorp's, which is valued at about A$6.2 billion.

Tatts shares fell 4 percent on opening on Friday, while the broader market was trading 0.1 percent higher.

Tabcorp and Pacific Consortium representatives were not immediately able to provide comment.

($1 = 1.3860 Australian dollars)