Firm bypassed ACCC for approval
Australian bookmaker Tabcorp’s plan to buy top lottery firm Tatts Group Ltd. has raised antitrust concerns from the Australian Competition and Consumer Commission. Tabcorp said it has addressed the issue in part by selling a small compliance unit, Odyssey Gaming Services, which generated AU$12.6 million in revenue in fiscal 2016.
Despite the move, Tabcorp apparently has gone beyond the ACCC to take its proposal to the Australian Competition Tribunal. According to the Australian, ACCC Chairman Rod Sims said he is “surprised” by the end run, but added that Tabcorp is within its rights to try it.
Shares of Tatts increased 4.6 percent to AU$4.27 on hopes the companies will get the go-ahead for the merger, though the stock was still below the AU$4.34 offer price—“a sign of lingering doubt,” said news agency Reuters. Tabcorp shares were up nearly 3 percent, their highest in a month.
Despite Tabcorp’s seeming concern that the ACCC would shoot down the takeover, Charlie Green, fund manager at Hunter Green Pty Ltd, did not fully concur. “The regulator acknowledges the dramatic change in the landscape and that’s why I think Tabcorp’s bid will stand up almost in its existing form,” Hunter said, in a statement made before Tabcorp elected to bypass the commission and go straight to the tribunal.
Meanwhile, Tatts said in a statement that it would “continue to work with Tabcorp to progress the competition approval process and all other regulatory approvals required.”
According to Reuters, this is the third time the companies have attempted to merge since 2006. The first time, the ACCC rejected the deal on antitrust grounds. The second time, in 2015, the companies themselves failed to reach an agreement.
