Two of Australia’s largest gambling firms, the Tatts Group and Tabcorp, recently called off a potential possible merger after a deal could not be struck. The merger would have created a mega-gambling company worth a total of about billion. Both companies confirmed no further talks are planned.
In a statement, Tabcorp said, “Tabcorp confirms that while confidential discussions have taken place regarding a potential merger, the companies were unable to agree mutually acceptable terms and those discussions have ended. There are no further discussions taking place between the parties relating to a merger or any other form of corporate transaction.”
In its statement, Tatts noted the parties were unable to reach an agreement on key transaction terms, “in particular as it relates to a nil-premium exchange ratio. As a result, these discussions have now concluded and there are no further discussions taking place between the parties relating to a nil-premium merger of equals or any other form of corporate transaction with Tabcorp.”
CLSA Research said, “For Tabcorp shareholders, a takeover bid for Tatts would likely be earnings dilutive, suggesting a merger of equals would be more palatable. For Tatts shareholders, a sale of wagering could de-risk the turnaround of that business and potentially drive a re-rating of Tatts’ remaining assets (i.e. lotteries).”
