Here is the full articleMatthew Tripp plans to combine Tabcorp...

Here is the full article

Matthew Tripp plans to combine Tabcorp withBetmakers in $4bn deal

Matthew Tripp plans to combineTabcorp and Betmakers assets to create a digital betting powerhouse.

· 35 MINUTESAGO MARCH 29, 2021

Digitalbetting pioneer Matthew Tripp plans to merge a spun-off Tabcorp wageringdivision with the ASX-listed Betmakers data and technology business in a dealthat could unlock $4bn in value for shareholders.

MrTripp, the former Sportsbet and BetEasy boss, has been stalking Tabcorp forseveral months with potential private equity involvement and recently struck a strategic advisory andshareholding deal with Betmakers as part of a $75m raising.

Butin a plan that the Tabcorp board is aware of, Mr Tripp would head a combinedTabcorp wagering and Betmakers entity that would rejuvenate its digitaldivision in Australia and seek a bigger presence in the lucrative andfast-growing US online wagering market.

FoxCorporation, headed by billionaire Lachlan Murdoch, and its FOX Bet brand isalso understood to be interested in being part of Mr Tripp’s plans, which will be pitched againstglobal giant Entain – the owner of the Ladbrokes and Neds wagering brands in Australia – and its $3bn preliminary tilt for Tabcorp’s wagering arm.

USprivate equity firm Apollo Global Management is also understood to beinterested, with Tabcorp chairman Steven Gregg declaring there are “no sacredcows” as the gaming company mulls finally demerging its wageringbusiness and on Monday rebuffed a $3bn takeover offer from British rival Entain.

Matthew Tripp has headed SportsBetand BetEasy in the past..

MrGregg, who succeeded Paula Dwyer as chairman in January, said the company wasembarking on a strategic review expected to take at least 10 weeks. All optionsabout the company’s future will be considered with Mr Tripp and Entain now leadingthe race.

Therehas been much speculation about Mr Tripp’s involvement in a Tabcorpplay, first revealed by The Australian in November, with Mr Gregg admitting the pair had met while calling for Mr Tripp to come up with a concrete proposal.

“Mattis talking to everybody and he has talked to me on a few occasions. And I said,‘Matt, if you’d like to come to me with a proposal, you’re most welcome to’.He’s a nice guy, but so far we haven’t seen anything of such a proposal. I’msure he’d like to run Tabcorp or buy Tabcorp but he has got to stump up. Thereis an open dialogue there, but that’s about it.”

Tabcorpshareholder Anton Tagliaferro, the investment director of Investors Mutual,which controls about 3% of Tabcorp, welcomed the prospect of Mr Tripp heading ademerged wagering and media business.

The search for a new CEO to replaceDavid Attenborough will be put on hold pending the outcome of the review.

“Ithink that would be a very positive advancement if that occurred because he hasa very good track record and he has shown an interest in turning that side ofthe business around. It would be a major positive,” Mr Tagliaferro told said.

“If you demerged the wagering and media entity it’s obviously got to have the appropriate management, the best positive management to take the company forward. The best thing to do is get the best people running it.”

MrTripp is said to believe a combined Tabcorp and Betmakers business would be acompelling proposition, with Betmakers poised to finalise the $56.2macquisition of Sportech in April, which includes a US tote business and whitelabel digital betting division that has more than 25 customers across NorthAmerica.

Betmakersshares have surged 970% in 12 months and closed up 6c or 5.94% on Monday.Tabcorp shares fell 13c to $4.69.

Meanwhile,Entain management believe the London-listed company has the financial power anddigital betting acumen to win any bidding race.

UK group Entain is also pursuingTabcorp.

AnEntain spokesman said the company “welcomed” Tabcorp’s strategic review butstill believed it was well placed to take over the wagering and media business.

“Entainwelcomes the announcement of Tabcorp’s strategic review and the opportunity itpresents for investors to weigh up the certainty of its proposal to acquire theTabcorp wagering and media business against a demerger, which is simply thestatus quo option.

“Entainis confident an acquisition of the business represents the most attractivepathway to value realisation for investors and that its business is a clear andobvious choice as a strong, long-term partner for Australian racing.

“Asan established and leading operator in Australia, Entain is uniquely positionedto get a deal done. It is absolutely committed to growing the overall racingmarket and to strengthening the funding outcomes for Australia’s racingindustry.”

Tabcorpchief executive David Attenborough, who was expected to retire, will stay onthroughout the review and will not step down until it has a more certainfuture. That could involve spinning off Tabcorp’s troubled wagering and mediadivision from its more lucrative lotteries business.

Tabcorpshareholders could receive equal shareholding in a newly listed wagering entityor take cash for their stock, while maintaining shares in a lotteries specificbusiness.

“Thereis a lot of work needed to be done but the aim here is to give shareholders thebest outcome possible – whatever it is. There are no sacred cows,” Mr Greggsaid.

“It’sgoing to take about 10 to 12 weeks, roughly. I don’t want to be prescriptivebecause things can come out of left field. But we are looking around the yearend’s result, ballpark. It’s not that far off.”

Tabcorpreceived a $3bn bid for its wagering and media division eight weeks ago. Sincethen it has received other offers, with private equity companies such as Apolloand Blackstone and possibly US casino groups and even rival Flutter, owner ofSportsbet, in the mix.

MrGregg declined to disclose the exact number but confirmed it was fewer thanfive, but said all offers had been highly conditional and therefore notsufficient to recommend to shareholders.

“Wehave had several (offers), some of which are serious in that they have beencommitted to paper, some aren’t that serious and are just full of talk.

“Theindustry is full of talk. It likes chatting.”

Theunderstanding is that the Tabcorp board has aspirations to achieve a price ofat least $3.5bn – $500m more than Entain’s bid.

Butasked if Tabcorp has a “magic number” in mind, Mr Gregg said: “[It] has got toaccompany a certainty of completion. And the offers that we have got, even fromthe credible sources, have been highly conditional.

“Thereforewe just need to handicap how much risk there is in a deal happening. There’s nouse having a huge number on it if it can’t happen. Then it’s not worthanything, so we have to put a lot of judgment around it.

“Ahigh number has got to accompany a high level of completion”.