Entain striving for Tabcorp’s struggling wagering units
Entain Plc confirmed earlier today that the rumours about its attempt at obtaining Tabcorp Holdings‘ ‘wagering and media’ assets were in fact true. This was confirmed this morning in a statement released by the company.
The company also said that the assets sign up with its current M&A strategy. This strategy has witnessed the company analyse a highly appealing proposition that will see the unification of its current Sportingbet franchise with Tabcorp properties, ‘creating Australia’s leading, integrated multi-channel and multi-brand wagering company’.
The group decided not to give out any details concerning the price and value of Tabcorp’s sports betting assets, and said that ‘discussions were at an early stage’. Entain’s proposal has definitely left the Australian gambling scene in shock, since this would end up being a dramatic bid that would change the structure of the market.
Over the years, Tabcorp’s TAB wagering units have definitely been struggling against its ever-growing rivals and online competitors, despite the fact that after it merged with ASX rival Tatts Group for AUS $11 billion back in 2017, it acquired absolute control of Australian retail betting.
Some issues with the unification left many of Tabcorp’s investors uncertain about whether or not the company is able to sustain in the long-term when it comes to supporting various new divisions after its expansion with the likes of Tatts lottery, keno and wagering units.
Until this very moment, the company’s governance has been adamant on the fact that Tabcorp is able to modify its media and wagering assets in order to get the company to get back into the competition against its rivals, including Flutter Entertainment’s groundbreaking SportsBet Australia brand.
Some company records revealed that as of June 2020, Wagering and Media generates about 40% of its AUS $5.22 billion revenue and is therefore its most profitable division.
Tabcorp’s statement this morning also claimed that multiple unprompted offers had been set forward for its wagering and media business. Tabcorp said that it will be keeping investors up to speed on ‘any serious approach’, but also disclosed that there is still no confirmation on whether any offers will be accepted or not.