Tatts and Tabcorp merger hit with federal court roadblock

The proposed merger between Tatts and Tabcorp was thrown into doubt today, after the Australian Federal Court ruled against a competition tribunal’s approval of the deal.

The reasons behind the Federal Court ruling will not be made public for five days but it means the Australian Competition Tribunal (ACT) will have to re-hear the case.

It had originally approved the deal, dismissing monopoly concerns about the power of the combined company.

The ruling is an unexpected roadblock for the two companies, which have already sent scheme booklets to investors ahead of a planned vote on the merger on 18 October.

Crownbet, which had been among those appealing the tribunal’s decision to the federal court, welcomed the ruling.

“I look forward to it going back to the competition tribunal and would be hoping for different outcome when it hears the case again,’’ said Crownbet chief executive Matt Trip.

“The merger is bad for competition, bad for punters and not in the public interest,” Trip added.

Tabcorp and Tats argue the merger is needed to help them survive in face of increasing regulation and competition from international bookmakers.

The tie-up is expected to deliver at least £70m per annum from synergies and business improvements.

In August it emerged Tabcorp has made a £11 loss in FY17, thanks in part to the costs of pursuing the merger with Tatts.