BetMakers officially enters Tabcorp race with A$4bn offer

BetMakers has tabled a A$4bn (£2.1bn) cash plus shares offer for Tabcorp’s in-demand wagering and media division, becoming the third company to enter the running for the business.

The sports betting supplier’s offer is comprised of an immediate cash payment of A$1bn (£544m), with the remaining A$3bn (£1.6bn) being paid in the form of shares in BetMakers.

Shares will be traded at a premium of 15% of the traded price of BetMakers prior to completion. The offer provides Tabcorp shareholders with a 65% interest in the combined BetMakers and Tabcorp wagering business.

However, BetMakers’ share price has fallen by more than 16% since the offer was announced to a closing price of A$1.340 on the Australian Securities Exchange (ASX).

Explaining the rationale for the acquisition attempt, BetMakers CEO Matt Davey said: “The potential acquisition of Tabcorp’s wagering and media business represents an exciting opportunity for BetMakers to deliver transformational growth and realise the value of these new assets in line with this strategy.

“Building on BetMakers’ success to date, the combined entity would be a compelling investment proposition as one of the most broadly deployed global racing networks in the market. We are uniquely placed to pursue commercial opportunities globally, and in particular, in the US.

“Tab and Sky Racing have a strong wagering brand, and we believe that BetMakers is uniquely positioned for an opportunity to grow and further enhance the business both in Australia and globally,” Davey added.

The offer is the largest bid for Tabcorp’s highly coveted wagering and media division, following an initial A$3bn bid from Entain in February. Entain returned with a higher bid of A$3.5bn in April after being initially rebuffed by Tabcorp.

Earlier this month, Apollo Global Management submitted a A3.5bn counter offer for the wagering business and also offered to buy Tabcorp’s gaming services division for an additional A$500m.

All three bids have been registered by Tabcorp, which is currently assessing them in line with a strategic review, which aims to “assess and evaluate” all structural and ownership options for the business to achieve returns for shareholders.

This includes a potential demerger, which could be implemented via a separation of the division, leaving the wider Tabcorp group to focus on the core lotteries and keno business.

Former BetEasy CEO Matt Tripp, who currently serves as a strategic adviser to BetMakers, told EGR in March that he was keeping a “keen eye” on the race for the wagering and media division. That keen interest has now become a concrete offer.

Discussing the offer, Tripp said he was excited by the potential opportunity to “reinvigorate” the Tabcorp betting arm.

“There is significant potential for the business to grow in partnership with BetMakers and I hope to get the opportunity to support the Australian racing industry, which relies on the success and growth of TAB,” Tripp explained.

“I have been very impressed with the world-class team BetMakers has put together and the enormous growth opportunities they have created globally, including in the rapidly emerging US wagering landscape, and the timing could not be better for this unique opportunity.

“Aside from the value that this offer is anticipated to unlock for shareholders in both companies, this is an incredibly exciting opportunity for the Tabcorp wagering and media business to maximise its commercial potential on a global scale,” Tripp added.