News: UPDATE 1-Australia's Tabcorp posts 5 percent rise in half-year profit

(Adds CEO statement, additional background.)

SYDNEY, Feb 2 (Reuters) - Australia's largest betting company, Tabcorp (TAH), on Thursday posted a 5 percent rise in half-year profit as it pushes ahead with its planned A$6.2 billion ($4.70 billion)purchase of lotteries group Tatts (TTS).

Tabcorp reported an underlying net profit of A$102.7 million for the half ended Dec. 31, up from $A97.5 million a year earlier.

The result was slightly above average estimates from two analysts of 4 percent growth in underlying earnings. Tabcorp reported a 13.8 percent rise in online betting turnover, but a 2.5 percent in retail turnover.

The interim dividend of A$0.125 fully franked was 4 per cent higher than a year earlier.

Tabcorp wants to buy Tatts in part to fend off a growing challenge from overseas online rivals like William Hill and Paddy Power Betfair .

"The combined group will have a suite of long-dated licences and an expected strong investment grade balance sheet," Tabcorp Chief Executive David Attenborough said in a statement on Thursday. "This will provide more capacity to invest, innovate and compete in an evolving global marketplace."

The Tatts board in December rejected a takeover proposal from a consortium including private equity giant KKR and Australian investment bank Macquarie Group (MQG). The group has not ruled out making a new offer .

Tabcorp's bid for Tatts has yet to receive approval from the competition regulator. ($1 = 1.3201 Australian dollars)