Tabcorp jumps on break-up reports
Tabcorp shares jumped just short of twelve-month highs on Tuesday after the gambling giant confirmed it had received “a number of unsolicited approaches and proposals” regarding its wagering and media business.
The wagering and lotteries incumbent has been under pressure from key investors to break up the company, following continued underperformance from the wagering business that would see it split from the lucrative lotteries division.
Major investors including Perpetual, Tanarra Capital and Investors Mutual have pressed for change for some time, resulting in a major shake-up of the management including the departure of chairwoman Paula Dwyer in December. Chief executive David Attenborough is also due to leave this year.
Tabcorp’s wagering business, which was already struggling against online competition, had a tough year in 2020 with COVID, as it forced the closure of TAB betting offices and venues and the suspension of major sporting codes.
Even before the pandemic, Tabcorp's shares trailed behind the wider market, with investors growing impatient to see the promised benefits from its multi-billion merger with Tatts back in 2016.
On Tuesday, the $9 billion company rose as much as 12%, ultimately ending the day 9% higher at $4.46.
In an ASX release, Tabcorp confirmed the proposals received were expressed to be confidential, indicative, non-binding and subject to numerous conditions including due diligence, financing and various regulatory approvals. There is no certainty that any transaction will occur.
The Tabcorp Board is assessing the proposals and the company will update the market in due course.