- Macquarie-advised group offers as much as $5.5 bln for Tatts
- Proposed offer does not require approval of competition regulator
- Tatts board has not decided whether new offer superior to Tabcorp bid
(Recasts, adds details of consortium and Tabcorp announcement)
Tatts Group (TTS) on Wednesday said a consortium advised by Macquarie Group Ltd (MQG) had offered up to A$7.3 billion ($5.47 billion) to buy the Australian lottery operator, disrupting an agreed takeover deal with Tabcorp Holdings Ltd (TAH).
The proposal from the Pacific Consortium, including Macquarie, First State Superannuation Scheme, Morgan Stanley Infrastructure and private equity giant KKR
, does not require the approval of Australia's competition regulator, which is examining the offer from Australia's biggest bookmaker Tabcorp. Tatts said in a statement that its board had not yet formed a view on how the Pacific Consortium proposal compared with the Tabcorp offer. Each member of the Pacific Consortium holds a 30 percent stake, except for Macquarie, which is the financial adviser and holds 10 percent, said a source familiar with the situation who was not authorised to speak publicly.
Tabcorp Holdings in October agreed to acquire Tatts for about A$6.4 billion to form a gambling powerhouse and fend off a growing challenge from overseas online rivals.
Anti-trust regulators had blocked a similar proposal 10 years ago, but Deutsche Bank analysts said the latest offer should be approved given the market had become more competitive with the entry of online rivals like Ladbrokes Coral Group
and William Hill . The bottom end of the Pacific Consortium offer values Brisbane-based Tatts at A$6.45 billion.
The new offer, which is contingent on due diligence, comprises A$3.40 per share cash for the lotteries business and shares in a spinoff wagering company the consortium values at A$1 to A$1.60 a share, Tatts said. The wagering company would be listed in Australia under the proposal unless it was sold to a strategic buyer first.
The consortium's proposal compares with Tabcorp's offer of 0.80 Tabcorp shares plus A$0.425 cash for each Tatts share held, which equates to A$4.145 based on Tabcorp's closing price on Tuesday.
A spokesman representing the Pacific Consortium declined to comment. Tabcorp could not be reached for comment.
Both offers would require the approval of 75 percent of Tatts shareholders.
Tabcorp last month purchased about 10 percent of Tatts for A$638 million. ($1 = 1.3351 Australian dollars)
