Entain “disappointed” with Tabcorp’s demerger announcement

The online gambling giant Entain has expressed disappointment at the Australian operator Tabcorp’s decision to spin its Lotteries and Keno and Wagering and Media divisions off into separate entities.

Yesterday, the Australian operator revealed plans to demerge its divisions in an effort to create more value for shareholders.

Tabcorp’s demerger

Yesterday Tabcorp revealed it would demerge its Lotteries and Keno and Wagering and Media divisions to create two standalone entities that will be listed on the Australian Securities Exchange. 

As outlined by the Australian operator, the demerger will create two separate entities; Lotteries and KenoCo, which will oversee Tabcorp’s lottery operation in Australia, and Wagering and GamingCo, which will cover all wagering, media, and gaming operations.

According to the operator, the demerger will allow shareholders to value each business on an individual basis. In addition to this, Wagering and GamingCo will be able to pursue expansion opportunities in overseas markets.

According to preliminary estimates, the demerger process could come with a one-off separation cost of between AU$225m (£122.3m/US$169.3m) and $275m, as well as $40m to $45m in ongoing costs.

The decision was made following a strategic review of the business which began in March. During the period the operator also considered the sale of its Media and Wagering division.

When the review was announced, Tabcorp revealed it had received several unsolicited offers from operators hoping to acquire its Media and Wagering operation.

Entain, Apollo Global Management, and BetMakers Technology Group were among those businesses that put forward an offer to acquire the Australian operator’s wagering and media operation.

Entain was among the first to make an offer that valued the operation at $3.05bn, while Apollo’s offer to acquire the Wagering and Media division as well as Tabcorp’s gaming services segment totaled $4bn. Betmakers also made a $4bn proposal to acquire the Wagering and Media division.

In April, Entain revised its offer to acquire the business, raising its offer to $3.5bn.

Entain “disappointed” with Tabcorp’s decision

Entain has now issued a statement where it expressed disappointment at Tabcorp’s decision.

The online gambling giant reaffirmed its position that its all-cash offer would have delivered “superior” outcomes for investors, customers and employees in the business as well as the wider gambling sector.

In a statement, the operator said: “Entain is disappointed by the decision of the Tabcorp Board, as we believe our all-cash offer would have delivered superior outcomes for shareholders, customers, employees, and the wider industry. Price discipline is essential in building on the significant shareholder value that our global growth strategy will deliver for all our stakeholders and we have a healthy pipeline of opportunities.

“Entain’s Australian business, comprising the Ladbrokes, Neds, Betstar, and Bookmaker brands, continues to build on a record year in 2020. We are confident that it will go from strength to strength as it delivers innovative and highly engaging products for its customers as well as supporting the health of the wider Australian racing industry.”