Following the completion of a strategic review of its business and Australian bookmaker Tabcorp Holdings Limited has reportedly announced that it will be spinning off its lucrative lotteries and keno arm into a separate listed entity.
According to a report from the Reuters news service, the Melbourne-headquartered firm used an official filing to detail that the projected move is set to be concluded by the end of next June and could see it incur separation costs of up to $206.6 million.
Tabcorp Holdings Limited reportedly disclosed that its lotteries and keno arm was responsible for about 55.8% of its total revenues in the 2020 fiscal year at almost $2.2 billion but will now be spun off as an independent Sydney-listed endeavor. The operator purportedly explained that the effort is to moreover involve its wagering and media division, which is responsible for an estate of over 4,400 land-based sportsbooks spread across Australia, remaining as a part of its larger business under its already-established listing.
In its report on the matter and Inside Asian Gaming divulged that the move comes as Tabcorp Holdings Limited was known to be entertaining separate bids for its wagering and media division from BetMakers Technology Group Limited, Entain and Apollo Global Management Incorporated. However, the company purportedly used the filing to declare that it has now decided to embark on a demerger rather than a sale as the ‘optimal and most certain path’ towards maximizing shareholder value.
Although the coming demerger could result in Tabcorp Holdings Limited incurring annual incremental costs of up to $33.8 million, the company nevertheless reportedly asserted that the move will allow it to create a ‘more focused operating profile.’ The firm purportedly furthermore disclosed that the two independent businesses are to consequently be better allied to their core operations and have improved access to new investment and potential future merger and acquisition opportunities.
Stephen Gregg serves as the Chairman for Tabcorp Holdings Limited and he reportedly used the filing to affirm that the demerger will also result in his firm’s Chief Executive Officer, David Attenborough (pictured), staying on for at least another twelve months despite the latter’s revelation last summer that he would be leaving before the conclusion 2021.
Reportedly read a statement from Gregg…
“The two businesses are expected to be leaders in their respective markets and create great experiences for millions of customers. They will both build on their heritage of sharing the benefits of their commercial success with governments, the racing industry, licensed venues, newsagents and other retail and business partners.”