Morgan Stanley-backed consortium ups ante in Tatts bidding war
Pacific Consortium tables revised all-cash bid of £4.2bn as it looks to derail the operator’s merger with Tabcorp
A Morgan Stanley-backed consortium today announced a revised all-cash offer of AU$7.3bn (£4.2bn) to acquire Tatts Group in an effort to derail the operator’s merger with Tabcorp.
The offer from Pacific Consortium, which is led by private equity firm KKR & Co and backed by Morgan Stanley Infrastructure, values the Brisbane-based operator at $4.21 per share.
The proposal from the consortium is less than Tatts Group’s current $4.36 trading price but higher than Tabcorp’s cash-and-scrip offer, which is valued at $4.20 based on its closing price.
Pacific Consortium consists of KKR & Co, Macquarie Group, Morgan Stanley Infrastructure and not-for-profit fund First State, and made a similar bid in November for the Australian gambling firm.
However, the consortium today claimed its new offer was an improvement on last year’s as it was all-cash and would not require regulatory approvals.
In response to today’s offer, Tatts Group said it believed the proposed Tabcorp merger was still in the “best interests” of its shareholders but would assess how the deals compare.
“Tatts, with its advisers, is assessing how the Revised Indicative Proposal compares to the merger proposal with Tabcorp… and is undertaking a full analysis of its key terms, underlying financial assumptions and conditions,” the operator said in a statement.
The proposed $11.3bn tie-up with Tabcorp is still subject to regulatory approval from the Australian Competition Tribunal, which is expected to announce its decision in mid-June.
The merger was originally expected to complete in mid-2017, with the combined firm aiming to compete more effectively with digitally-focused foreign bookmakers.
Tabcorp’s David Attenborough is set to take the reins as CEO and managing director should the deal complete.