I am a bit baffled that these two gamers could enter into merger...

I am a bit baffled that these two gamers could enter into merger talks when there is around $1 bil hanging on the outcome of the High Court challenge. If both coys' get a favourable decision then both coys can consider a merger a win win outcome. But if one was to win and the other to loose out, surely, one would think the 'merger of equal' cannot be on the tabled.
IMHO the best outcome for Tatts would be to split the wagering and lotteries arm, similar to what TABCORP did with there casino business (now called Star city resorts). This would give the best return for the s/holders. This way there will be more prospective buyers that are interested and paying a good premium to each of the businesses.