Entain in talks to buy wagering business from Australian giant Tabcorp

The owner of Ladbrokes and Coral has revealed it has made an approach to buy the wagering arm of Australian gambling giant Tabcorp following speculation it was preparing a bid.

Entain is already one of the smaller players in the Australian market through its Ladbrokes and Neds brands, but a deal with Tabcorp would make it the biggest racing and sports betting operator in the country.

There has been speculation in Australia that some investors want to split Tabcorp's lotteries business from the company's wagering arm, which has a market share of more than 40 per cent but is facing stiff competition from Flutter Entertainment's Sportsbet.

The Australian Financial Review reports the business, which runs tote and fixed-odds betting and makes close to Aus$400 million in earnings (c£220m/€250m) a year, could be worth around Aus$£2.8 billion.

A statement from Entain released on Tuesday morning said the company noted press speculation regarding a possible transaction involving Tabcorp, "and confirms that it has made a non-binding indicative offer to acquire its wagering and media business".

It added: "While discussions are at an early stage, any transaction would be in line with Entain's current M&A [mergers and acquisitions] strategy of expanding across regulated international markets.

"As such this would present an opportunity to acquire an attractive business which, if combined with Entain's existing Australian business, would create a leading, integrated multi-channel and multi-brand wagering company."

The media component mentioned in the statement is the Sky Racing channel in Australia.

Tabcorp also released a statement in which it confirmed it had "received a number of unsolicited approaches and proposals" in relation to its wagering and media business.

The company added: "There is no certainty that any transaction will occur. The Tabcorp board is assessing the proposals and Tabcorp will update the market in due course."

The news is the latest episode in a turbulent start to 2021 for Entain, until recently known as GVC Holdings.

The company was the subject of a takeover bid itself from MGM Resorts International, although the US casino giant walked away last month after being told its approach undervalued the company.

Jette Nygaard-Andersen: new chief executive of Entain

Entain has also appointed a new chief executive in the shape of Jette Nygaard-Andersen following Shay Segev's announcement he was leaving the company six months after taking over the role from Kenny Alexander.

Entain's share price was up 7p at 1,290.5p on Tuesday afternoon following the Tabcorp news.

Read more:

Entain appoint Jette Nygaard-Andersen as new chief executive

Shares in Ladbrokes Coral owner plunge as MGM walks away from takeover bid

Entain in advanced talks to appoint first female chief executive

Bombshell for Ladbrokes and Coral owner Entain as chief Shay Segev quits

Shares in Ladbrokes owner Entain soar after £8.1 billion US casino takeover bid

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