News: TAH UPDATE 1-Australia's Tabcorp to spin-off Lotteries & Keno business

(Adds background on review, M&A interest)

July 5 (Reuters) - Australia's Tabcorp Holdings Ltd (TAH) said on Monday it would spin off its Lotteries & Keno business into a listed entity, drawing an end to a company-wide review it undertook earlier this year as interest built for a separate unit.

The demerger will create two listed-companies, Lotteries & Keno (L&K) and Wagering & Media (W&M) - the latter being the target of buyout offers from Entain PLC ENT.L , Apollo Global Management Inc APO.N and Betmakers Technology Group Ltd (BET) .

In late March, Tabcorp undertook a review that looked at potentially spinning off either business or selling the W&M arm.

The company said it considered proposals to sell the Wagering & Media business, and "concluded that a demerger of Lotteries & Keno is the optimal, and most certain, path to maximise the value of both businesses for Tabcorp shareholders."

Tabcorp said selling the W&M arm, which was hit hard by the halt to sporting events and closure of betting shops due to the novel coronavirus pandemic, would have involved several regulatory approvals that were "uncertain" and could take a long time.

However, the company said it "remains open to future engagement with bidders on revised proposals that deliver sufficient value and certainty for Tabcorp shareholders."

It said it expects the demerger to be completed by the end of June 2022, and result in separation costs of A$225 million to A$275 million ($169.09 million to $206.66 million).

Revenue at the Lotteries and Keno business came in at A$2.92 billion in fiscal 2020, accounting for 55.8% of Tabcorp's total revenue. ($1 = 1.3307 Australian dollars)