MELBOURNE: Tabcorp Holdings Ltd, Australia’s largest gaming group, increased its offer for rival Tab Ltd to A$2.03bil yesterday, but failed to top a competing bid that has hit a regulatory hurdle.
Queensland-based UNiTAB Ltd’s rival bid is worth A$2.1bil, but Tabcorp’s offer has won crucial backing from the New South Wales racing administrator and has a richer cash component. The racing administrator has rejected the UNiTAB offer, saying it is less favourable.
Tabcorp, which owns 18,000 gaming machines and four of Australia’s 13 casinos, raised its bid from an initial offer of A$1.9bil, but the new bid was less than investors had expected.
“It is not a knock-out bid,” said John Sevior, a fund manager with Perpetual Investments. “We probably haven’t seen the end of this.”
The stakes are high because Australians are the world’s biggest gamblers, spending more per head than any other nationality.
Tabcorp is offering A$4.50 in cash and shares for each share of Sydney-based Tab. UNiTAB’s offer, which is also in cash and shares, was worth A$4.65 a share based on yesterday closing price. Tab’s shares closed down 2.2% at A$4.52.
A Tabcorp takeover of Tab would create a company that would dominate gaming and wagering in Victoria and New South Wales, Australia’s two most populous states. – Reuters