Published: Thu, December 15, 2016
Economy | By Melissa Porter

Consortium offers A$7.3bn for Tatts Group

Consortium offers A$7.3bn for Tatts Group

The bid by the Pacific Consortium values Tatts, which holds several lottery licenses in Australia and owns over-the- counter betting shops, at up to 7.34 billion Australian dollars (US$5.5 billion).

In a statement, Tatts said it has yet to form a view on how the proposal compares with the Tabcorp offer that is now valued around A$6.03bn.

Tatts investors will receive A$3.40 in cash and a share in a newly separated wagering unit that will be valued at between A$1 and A$1.60.

Tatts said it was assessing the unsolicited offer from the consortium - which includes First State Superannuation Scheme, North Haven Infrastructure Partners and Kohlberg Kravis Roberts & Co - although its directors were still supportive of the Tabcorp merger.

Macquarie Bank has made a bid for Tatts, getting between an $11 billion merger with Tabcorp.

Tabcorp in October agreed to acquire lottery operator Tatts to create a gambling powerhouse in an effort to fend off a growing challenge from overseas online rivals. The Tabcorp merger valued Tatts at Aus$4.34 per share.

The offer is structured so that the Macquarie consortium gets the lottery business at Tatts.

Tabcorp has outlined A$1.4 billion of synergies associated with the Tatts merger, all of which relate to wagering rather than lotteries.

It revealed that it had held discussions with some members of the Pacific Consortium led by Macquarie in the middle of the year, but talks had been abandoned before it began dealing with Tabcorp.

Radzyminski said he believed Ontario Teachers' Pension Plan (OTPP), the owner of United Kingdom lottery operator Camelot Group, might also consider bidding for Tatts.

Shares (Berlin: DI6.BE - news) in Tatts closed 8.45 percent higher at Aus$4.49 on Wednesday.

"In the meantime, the directors of Tatts continue to believe the proposed Tabcorp merger is in the best interests of Tatts' shareholders and unanimously recommend the proposed Tabcorp merger, in the absence of a superior proposal.", it said. Wagering, he said, was more volatile.

A spokesman for OTPP could not be reached for comment.

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