On Friday, BetMakers announced it has submitted an indicative proposal to acquire Tabcorp’s Wagering and Media business for an enterprise value of $4.0 billion.
BetMakers believes the combination would be transformational and combine the technology capabilities and global platform of BetMakers with the scale and content assets of Tabcorp Wagering and Media. As a result, it would be a significant opportunity to enhance Tabcorp Wagering and Media’s consumer proposition in Australia and improve monetisation of its content globally by leveraging BetMakers’ technology and B2B expertise. They see it as a compelling opportunity for all stakeholders, with Tabcorp and BetMakers shareholders expected to share in significant value to be unlocked; improved funding to the Australian racing industry; and new products for customers.
BetMakers has indicated that the value of its proposal is $4.0 billion which is comprised of cash consideration of $1.0 billion and new shares in BetMakers with a value of $3.0 billion. The number of shares that BetMakers proposes to issue would be fixed at the time that any potential transaction is agreed between Tabcorp and BetMakers, and would be priced at a 15% premium to the BetMakers share price at that time.
The proposal is subject to numerous conditions including due diligence, arranging financing, receipt of all relevant regulatory approvals, and obtaining various third-party approvals and consents.
The Tabcorp Board has not yet formed a view on the merits of the proposal and will assess it in the context of a previously announced strategic review. Tabcorp is currently undertaking a strategic review to assess and evaluate all structural and ownership options to maximise the value of Tabcorp’s businesses for the benefit of shareholders. These options may include a potential sale of the Wagering and Media business to a third party or a potential demerger of either the Wagering and Media business or the Lotteries and Keno business.
On Friday, Tabcorp shares finished 2.2% higher on the news, while BetMakers fell 16.2%.