The James Packer-backed CrownBet has called the decision to allow Tabcorp’s takeover of Tatts Group as “irrational” and “illogical”, in its legal push to overturn the ruling.
CrownBet’s defence against the Australian Competition Tribunal’s approval of the mega-deal comes as the Australian Competition & Consumer Commission attempts to stop Tabcorp completing the merger while appeals against the approval are heard.
CrownBet, which will have its appeal dealt with alongside the ACCC’s in the week of August 28, has effectively argued that the test the tribunal applied to determine its ruling was wrong and that its decision was not rational.
The corporate bookmaker said in its filing to the Federal Court that the decision was “so unreasonable that no reasonable person could have so exercised the power and/or the decision was otherwise contrary to law”.
“It was irrational, illogical and not based on findings or inferences of fact supported by logical grounds,” CrownBet’s legal team argued.
The bookmaker also backed the reasons put forward by the ACCC in its appeal of the approval of the Tabcorp-Tatts tie-up.
ACCC chairman Rod Sims said this week it was appealing against the decision because it believed there were three points of law that were of profound importance to how the regulator conducted many authorisation decisions each year.
“I’m afraid we think there are some reviewable errors here; they are of profound importance,” Mr Sims said.
A Tabcorp spokesman said yesterday that the company remained committed to the transaction and believed that the merger would be completed in the last quarter of this year.
Tatts Group joined the fight yesterday, with its legal representation appearing in court to add its voice to Tabcorp’s opposition to the claims made by the appeal proponents.
The tribunal, headed by Federal Court judge John Middleton, concluded last month that Tabcorp’s takeover of Tatts had “substantial” benefits to the public and that there were “no material detriments weighed in the balance which are of significance or likely to arise that outweigh the benefits”.
Despite appeals against that decision, Tabcorp is pushing ahead to complete the merger — which would create an $11 billion gaming giant — and the scheme booklet is expected to be delivered to Tatts’ shareholders in coming weeks.
The ACCC’s injunction request, to stop Tabcorp completing the deal until the appeals are dealt with, is scheduled to be heard on July 27. A ruling in the regulator’s favour could further push back completion of the long-awaited transaction.
Tabcorp chairman Paula Dwyer had told shareholders last month after the tribunal approved the deal that the company was working towards implementing the merger next month.
But the company had to tell its investors this week that the ACCC’s application to the Federal Court to review the approval would affect the timing of implementation, forcing it to shift the completion date to the last quarter of this year.
Industry insiders said it was highly unlikely the ACCC’s injunction request would be granted or that the appeals on the approval would be upheld.
If the ACCC’s appeal was successful, the matter would be referred back to the tribunal for review, but it would not have to restart proceedings. Sources close to the case said even if the tribunal had to review the decision, it was unlikely to change its view that the merger should be allowed to proceed.
JPMorgan analysts said they did not believe the ACCC’s appeal would affect the final decision on the merger.
“We forecast the Federal Court will require the tribunal to reconsider at least one of the ACCC’s three grounds for review due to the misalignment of their judgments,” the bank’s gaming analysts said.
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$5.30 Sentiment: Buy Disclosure: Not Held
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