Tatts merger is on debate

Several investment and gaming companies are interested in acquiring the Australian operator.

Australia.- Tatts Group Limited, one of the biggest Australian gaming companies, is assessing its acquisition by several interested international operators, such as Paddy Power, Ladbrokes Coral and William Hill. Although the merger with Tabcorp seemed imminent, Tatts confirmed that they’re considering the deal proposed last week by Pacific Consortium.

However, the Australian newspapers are not every positive about the suitor. “We do not believe the consortium proposal ascribes a sufficient premium for the lotteries business and we believe the valuation of the wagering and gaming businesses is based on some overly optimistic assumptions,” deutsche analyst Mark Wilson told to The Australian.

And he added: “With two proposals on foot, there is clearly interest in Tatts’ suite of businesses and one could not rule out possibility of a ­competing bidder nor a higher offer from one of the existing ­proponents.” Whilst Tabcorp, the main suitor, offered in October a cash-and-scrip deal of AUS$ 4.34 per share, Pacific Consortium is proposing AUS$4.40-$5 a share, AUS$3.40 cash, which includes a ­dividend Tatts’ shareholders are already scheduled to receive.

The consortium’s bid price includes one share in a new wagering vehicle, valuated at AUS$1-$1.60 a share, with the upper end accounting for synergies if a strategic buyer takes out the vehicle. The deal offers the total of AUS$7.3 billion.