Ladbrokes Coral in takeover rush to acquire Tabcorp
AUSTRALIAN gambling giant Tabcorp Holdings is the target of a takeover bid by newly-combined UK betting powerhouse Ladbrokes Coral.
A multi-billion pound bid to acquire the Australian operator has reportedly been in the works since the UK competition watchdog formally approved the merger.
The Mail reports that Lads-Coral is developing a proposal for Tabcorp stakeholders, hopeful it can make amends for a failed takeover bid in 2013. Tabcorp CEO, David Attenborough, rejected Ladbrokes’ advances at the time, despite having been a former executive at the company.
Lads-Coral appears intent on expanding its share of the lucrative Australian betting market, having entered in 2013 with the acquisition of Bookmaker.com.au’s parent company. Its stock is rising, with revenue improving more than 90 percent in its third quarter results.
The proposed merger may face fierce opposition from Tabcorp stakeholders, with the company having entered the UK market in August alongside News Corp with the launch of Sun Bets, an online betting venture.
The company is also in the middle of a proposed merger with local competitor Tatts Group. The Mail reports that Lads-Coral has little, if any, interest in Tatts, and that it hopes to have a takeover bid prepared for Tabcorp stakeholders before any Tabcorp-Tatts merger goes through. Tabcorp recently acquired a 10 percent stake in Tatts.
Any proposed takeover deal would be worth more than £2bn ($3.3 billion AUD). Tabcorp’s market capitalisation is $3.8 billion AUD. The big challenge for both operators would be to convince stakeholders of any merger or takeover. Lads-Coral stakeholders would know well the regulatory challenges in such a large proposal, particularly across international jurisdictions.
Lads-Coral has until mid-2017 to convince Tabcorp shareholders, with Tabcorp predicting that its proposed merger with Tatts will be finalised by that time.
What would the effect be of having Australia’s biggest gambling country owned by a UK giant? The Australian Government has done nothing but create laws to protect and assist Tabcorp’s growth in a market fuelled by overseas invaders.
What would happen if all of those laws and restrictions on overseas bookmakers came back to bite them?
As a publicly-listed company, the federal government technically has no say in Tabcorp’s decision if Ladbrokes Coral makes a big play, but you can bet your bottom dollar that it won’t be received well.
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