Tabcorp Holdings is expecting to win a vote by Tatts Group stockholders next month and hopes to complete its merger with the group by November.
Tabcorp is making the prediction even though the Australian Competition and Consumer Commission is applying to the Federal Court for a judicial review of the Australian Competition Tribunal’s decision to approve the move.
A shareholder’s vote has been ordered by the Supreme Court of Victoria and scheduled for October 18. The court is expected to approve the merger if shareholders also approve it.
Tabcorp has released a “Scheme Booklet” which include the results of an independent expert’s report finding that the merger is “in the best interests of Tatts shareholders in the absence of a superior proposal.”
“The Independent Expert referred to the fact that the value of Tatts shareholders’ collective interest in the combined group will be greater than their contribution of value to the combined group and the terms of the transaction provide a meaningful premium and payment for synergies and business improvements,” the report said.
Tabcorp has calculated the implied value of the merge at between AU$4.25 to AU$4.67 per Tatts share, representing a “significant premium” over the independent expert’s fundamental value of Tatts shares on a standalone basis of AU$3.68 to AU$4.00 per Tatts share, according to a report at Inside Asian Gaming.
The company said it expects the merger to deliver at least AU$130 million annually of EBITDA from synergies and business improvements. Integration of Tatts and Tabcorp is expected to take around two years to complete.
“The release of the Scheme Booklet represents another important step towards creating a world-class, diversified gambling entertainment group that is expected to deliver substantial financial and other benefits for both Tabcorp and Tatts shareholders, customers, business partners and other stakeholders,” said Tabcorp Chairman Paula Dwyer in a press release. “Together we will be well placed to pursue more investment and innovation across all our businesses, including best-in-class digital products and experiences.
“With substantially all pre-implementation regulatory approvals now in place, we look forward to continuing to work with Tatts to successfully complete the Transaction and are expecting implementation to take place in November 2017,” the release said.
