Entain 'disappointed' after Tabcorp turns down offers for wagering business

Australian gambling giant Tabcorp has turned down bids for its wagering business from suitors including Ladbrokes Coral owner Entain, although it has left the door open to new offers.

Instead Tabcorp has decided to spin off its successful lotteries and Keno business from its struggling wagering arm and list it as a new company.

Entain, along with private equity group Apollo Global Management and Australian technology company BetMakers, had made an offer for Tabcorp's wagering arm of around A$3.5 billion (approx £1.9bn/€2.2bn).

However, following a strategic review process Tabcorp said it had concluded a demerger of the lotteries and Keno business was "the optimal, and most certain, path to maximise the value of both businesses for Tabcorp shareholders".

It added in a statement on Monday: "There are various complex legislative, regulatory, competition, racing industry and other third-party approvals required to effect any potential sale of the wagering and media business.

"The process for, and likelihood of, obtaining these approvals is uncertain and expected to take an extended period of time."

Nevertheless, Tabcorp said it remained "open to future engagement with bidders on revised proposals that deliver sufficient value and certainty for Tabcorp shareholders".

The company added that in the case of BetMakers it would "continue discussions in relation to potential commercial opportunities in international markets".

Entain said it was "disappointed" by Tabcorp's decision, adding: "We believe our all-cash offer would have delivered superior outcomes for shareholders, customers, employees and the wider industry."

Analyst David Brohan of Goodbody said it remained to be seen whether Entain would come back with a new offer that would appeal to Tabcorp.

He added: "In terms of the knock-on impact of Tabcorp’s wagering and media business not transacting, it is probably a positive for Flutter in Australia as competition would have been heightened.

"It could also increase the probability of Entain exploring other material transactions such as the sale of William Hill's European assets."

The prospect of Entain looking at William Hill was raised over the weekend in a report by the Daily Telegraph, but it added that Apollo Global Management was leading the race for William Hill's non-US assets which are set to be sold by the bookmaker's new owner Caesars Entertainment.

The report claimed the first round of bids was due on Tuesday following an auction process which began in May.

Read more:

Ladbrokes owner Entain increases bid for Australian giant Tabcorp to £2bn

Entain in talks to buy wagering business from Australian giant Tabcorp

Why £2.9 billion Caesars takeover is not the end of the story for William Hill

Caesars Entertainment completes £2.9 billion takeover of William Hill

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