In Australia, a consortium that includes multi-national private equity group KKR And Company and global investment banking firm Macquarie Group Limited has reportedly made an offer to buy local lottery operator Tatts Group in a deal worth up to $5.37 billion.

According to a report from the Reuters news service, the move from Pacific Consortium could jeopardize Tabcorp Holdings Limited’s previously announced $4.44 billion plan to purchase its Brisbane-based rival by sparking a bidding war although Tatts Group officially announced that its board of directors had yet to form an official view on the new proposal.

Reuters explained that Pacific Consortium also includes Morgan Stanley Infrastructure and First State Superannuation Scheme and has the additional advantage of not needing approval from the nation’s competition regulator, which is closely examining the offer from Tabcorp Holdings Limited.

The nation’s largest bookmaker, Melbourne-based Tabcorp Holdings Limited has a reported market capitalization of around $3 billion and operates Australia-facing brands including Sky Racing and Tab.com while having experience in the United Kingdom thanks to a partnership with The Sun newspaper. It has been holding negotiations regarding the purchase of Tatts Group since November of 2015 and revealed in October that the union, which would create the biggest gambling company in Australia and provide stiff competition to established operators such as Ladbrokes, William Hill, Unibet and Bet365, could be completed by the middle of next year subject to the receipt of necessary regulatory approvals.

“The value of the lotteries business is starting to be recognized,” Charlie Green, a director for securities firm Hunter Green Institutional Broking, which owns Tatts Group shares, told Reuters. “It is now undeniably game-on in terms of an auction.”

Gabriel Radzyminski, Managing Director for activist investor Sandon Capital, which also owns shares in Tatts Group, told the news service that this latest offer is unlikely to be the last.

“The consortium bid, in a way, is an exploration if Tabcorp [Holdings Limited] values lotteries or not,” said Radzyminski.

Investors reacted positively to the latest offer with shares in Tatts Group soaring by up to 13% to a nine-year high of $3.38.

Reuters reported that each member of Pacific Consortium holds a 30% stake in the entity except for Macquarie Group Limited, which has a 10% share, while Chairwoman Kerry Schott declared that the group has a record of long-term investment in assets that “deliver annuity-style returns similar to infrastructure assets”. Its proposed offer for Tatts Group would reportedly see current stakeholders receive $2.50 per share along with shares in a Sydney-listed spin-off wagering company the consortium values to be worth $0.73 to $1.17 each.

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