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Tabcorp's Paula Dwyer will take the reins when her company merges with Tatts Group, though its chairman Harry Boon will stay on the board, under a proposed merger. Jesse Marlow
Wagering giant Tabcorp has the champagne on ice as it moves one step closer to a company-transforming $11 billion deal with rival Tatts Group.
Street Talk understands Tabcorp and merger partner Tatts were expecting only minor conditions to be applied to their slated tie-up on Tuesday morning, when they head to court to hear from the Australian Competition Tribunal.
While the companies may request trading halts, it's expected to be good news.
Tabcorp is expected to be asked to make some concessions around its Sky Racing channel, including ending an exclusivity deal where the purchase of Tabcorp-owned Sky vision is conditional on having a TAB outlet in the same venue.
It's something Tabcorp is likely to concede, in an effort to gain control of Tatts and shore-up both the future of its wagering business and gain access to Tatts' lotteries.
Tabcorp, Tatts and their respective sets of lawyers and bankers were relaxed about the outcome on Monday night, pleased with their decision to head to the ACT and bypass the Australian Competition and Consumer Commission's process.
Should Tuesday's hearing go as expected, Tabcorp and Tatts would be expected to have an updated scheme booklet in front of Tatts shareholders within one month, and a shareholder vote as early as August.
It means the two companies could be combined by the start of the fourth quarter - about two years after they got serious, again, and one year after agreeing the all-important merger ratio. Tabcorp has offered 0.8 Tabcorp shares plus 42.5 cents cash for each Tatts share. Tabcorp already owns a 10 per cent stake in the business.
The question is what the ACT decision means for Tatts' rival suitor, Pacific Consortium.
While the KKR & Co and Macquarie-backed bidding group may be watching closely on Tuesday, it seems reluctant to up its offer unless there is a new strategic angle opened by the tribunal.
Of course Pacific Consortium has already tried twice to nab Tatts, only to be rejected. Its most recent bid was a $4.21 a share cash proposal, which was deemed to be inferior to Tabcorp's scrip-heavy offer.
Tatts is advised by Goldman Sachs and Clayton Utz, while UBS and Herbert SMith Freehills are tending to Tabcorp. Law firm Gilbert + Tobin has spearheaded the competition work.
