US private equity group Apollo was also reportedly in pursuit of Tabcorp’s wagering business,while the Murdoch family’sFox Corporation has also explored making an offer as it prepares to launch its own FoxBet brand in Australia.
However Tabcorp,valued at $10 billion,said it would now run a three-month strategic review that could open the door to either selling the wagering division or hiving it off from its booming lotteries division in a demerger.
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Mr Gregg,who took over as chair from Paula Dwyer in January,said he was “very happy” for suitors to come back with higher bids. Market sources say Tabcorp wants at least $3.5 billion for the wagering arm but the review would have to fully assess how difficult a sale would be.
“Its just as much about... deal certainty as it is value,” he said. “At the moment value is well under what it is worth,but also we need to get comfortable with completion risk.”
Hurdles to a sale would include the Australian Competition and Consumer Comission (ACCC) objecting to Ladbrokes’ owner Entain buying the Australian wagering market’s biggest player,Mr Gregg said. Meanwhile,any new owner would also need the blessing of state-based racing bodies that licence TAB’s monopoly retail operations.
“Everything is overcomable - it’s just a matter of time and money and disruption,” he said. “If we go down a path of selling the company,which would take 12 months to do,you want to be very clear that you’re going to sell the company at the price you agreed.”