Tabcorp distances itself from Ladbrokes Coral merger rumours
Operator says it remains committed to tie-up with fellow Australian firm Tatts, despite weekend reports of potential deal with UK giant
Tabcorp says it remains “fully committed” to its planned merger with local rival Tatts after weekend reports suggested Ladbrokes Coral was ready to swoop in with a multi-million pound bid for the Australian operator.
According to The Mail on Sunday, the recently merged Ladbrokes Coral has in the past few weeks appointed advisors to work on a proposal for Tabcorp, which only last month struck a £7bn merger deal with Tatts, expected to complete in mid-2017.
According to the report, Ladbrokes Coral has no interest in acquiring Tatts and is ready to scupper the planned deal between the two Australian land-based giants. Legacy Ladbrokes previously failed in an attempt to combine with Tabcorp in 2013.
However, while a spokesperson for Tabcorp declined to comment specifically on the reports, he appeared to pour cold water on speculation, telling EGR it remained full-steam ahead for the Tatts merger.
“It’s not our practice to comment on speculation,” the spokesperson said. “We remain fully committed to progressing the combination of Tabcorp and Tatts. We’re aware of our continuous disclosure obligations,” he added.
Ladbrokes Coral declined to comment, however, EGR understands the firm is not planning to make any RNS announcement.
Should the reports be true, the clock would be ticking on Ladbrokes Coral, with any deal needing to be agreed before the Australian Competition and Consumer Commission rubber-stamps the Tabcorp-Tatts deal in February.
Ladbrokes Coral and Tabcorp are valued at roughly the same amount, around £2.4bn, and the UK firm would likely need to raise significant cash, with the recent merger landing the combined firm net debt of approximately £1bn.
Meanwhile, a senior source at Ladbrokes Coral told EGR he didn’t believe there was “any truth to the reports”.
Ladbrokes has grown quickly down under and has emerged as a top five online player in a market led by Paddy Power Betfair’s Sportsbet brand.
Meanwhile, Tabcorp and Tatts rule the retail roost, therefore any combination would give the enlarged firm a strong multi-channel proposition, a tactic which has worked successfully for both Ladbrokes and Coral in the UK and Italian markets in recent years.