More Bidders For Tatts? (update)

Reports from Australia indicate that Ladbrokes-Coral and William Hill may also be interested

Tabcorp's proposed acquisition of Tatts in Australia, already under threat from a competing offer from the Pacific Consortium may be further complicated by British bookmakers William Hill and Ladbrokes-Coral, who are believed to be potential new bidders for the wagering side of Tatts business, according to reports Monday in The Australian newspaper.
Quoting unnamed sources, the newspaper said that the Consortium, comprised of US private equity company Kohlberg Kravis Roberts, First State, Morgan Stanley Infrastructure and Macquarie, had indicated that its interest lies mainly in acquiring Tatts' lucrative lottery business, and its wagering side may be spun off.
The sources claimed that William Hill and Ladbrokes had indicated to the Consortium that they would be interested in the wagering arm should its bid for Tatts prove successful.
Last month Tatts and Tabcorp agreed on a scrip deal in which Tabcorp would buy the company at A$4.34 a share in an offer that is said to generate $130 million in synergies.
The Consortium offer is reportedly between A$4.40 and A$5 a share, with shareholders receiving A$3.40 a share in a cash payment for the lotteries arm and payment in scrip for the wagering arm, which the consortium expects to equate to A$1.60 a share…overall, that's 18 times the company's earnings, according to the Consortium.
However, the sources say that Pacific has not yet guaranteed A$1.60 a share in scrip for the Tatts wagering arm, which represents an 11 x earnings.
Observers are predicting that Pacific will guarantee the A$1.60, and that Tabcorp will then likely increase its offer.
William Hill and Ladbrokes both have online gambling operations in Australia, which are putting pressure on long-established local companies like Tatts and Tabcorp. There were rumours prior to the Pacific offer surfacing that Ladbrokes had been eyeing Tatts.
Macquarie also took a run at Tatts earlier this year in a consortium with Brookfield Investments, but that failed when Brookfield pulled out of the deal (see previous InfoPowa report).

Online Casino News Courtesy of Infopowa