The wagering giants could be reviving its previously stalled merger talks with Tatts Group.
[dropcap]A[/dropcap]ustralian operator Tabcorp could soon be seeking to revive its stalled merger deal with rival Tatts Group after the two companies announced acquisition deals.
The gambling operators had been discussing details of a merger in November, creating a deal worth $9.4bn (E8.4bn), but those same discussions fell through days later because terms could not be agreed between the two.
Analysts are now saying that the negotiations could soon be revived as competition from corporate bookmakers battling for market share with Tabcorp intensifies.
If a deal were to go through, Deutsche analyst Mark Wilson estimates: “Tabcorp could pay up to AU$4.75 (E3.27) per Tatts share for 100 percent of the company, or about AU$80m (E55m) in synergies.”
We believe Tabcorp will continue to assess the merits of a merger or the acquisition of Tatts’ wagering business.
“While both Tabcorp and Tatts confirmed that no further discussions are taking place between the parties relating to a merger or any other form of corporate transaction, we believe Tabcorp will continue to assess the merits of a merger or the acquisition of Tatts’ wagering business.”
“We believe the regulatory risks can be overcome by way of providing undertakings to the respective state governments and racing bodies.”
Shares in Tabcorp were more than 6 percent higher in late morning today at AU$5.14 (E3.54) after it reported annual results were to be in line with market expectations. Tatts was up 1.3 per cent higher at AU$4.09 (E2.81).