In Australia, lottery operator Tatts Group has turned down the $5.37 billion takeover offer from a consortium that includes multi-national private equity group KKR And Company and global investment banking firm Macquarie Group Limited in favor of a rival bid from Tabcorp Holdings Limited.

Brisbane-based Tatts Group stated that it rejected the takeover offer from Pacific Consortium because it was “not superior” to the firm’s $4.44 billion plan to merge with Tabcorp Holdings Limited, which is set to create an entity worth around $8.11 billion.

“The Tatts [Group] board has now assessed the indicative proposal and determined it is not a superior proposal and cannot reasonably be expected to result in a superior proposal,” read a statement from Tatts Group. “The board continues to believe that the proposed Tabcorp [Holdings Limited] merger is in the best interests of Tatts [Group] shareholders and unanimously recommends [the merger] in the absence of a superior proposal.”

Tatts Group had denied Pacific Consortium access to its books in order to conduct due diligence and declared that it would not engage in talks regarding the venture’s proposal. It revealed that the consortium had made some key assumptions that were unknown, incorrect or inconsistent with its current beliefs.

Reuters earlier revealed that Morgan Stanley Infrastructure and First State Superannuation Scheme were also thought to be members of Pacific Consortium while Melbourne-based Tabcorp Holdings Limited is the nation’s largest bookmaker and has a reported market capitalization of around $3 billion.

“Pacific Consortium is reviewing its position and absorbing the details of the material profit downgrade announced by Tatts Group today,” read a statement from Pacific Consortium.

Tabcorp Holdings Limited 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.

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