July 5, 2021 3 min read


Tabcorp Denies Bidders, Creates Two Separate Business Entities

Australian gambling company Tabcorp Holdings announced today it is not going to sell its media and gaming businesses and instead, will undertake a demerger to split the business into two separate entities.

Strategic Review Complete

The announcement marks the end of the strategic review undertaken by Tabcorp on March 29, 2021, in an attempt to evaluate all structural and ownership options to deliver maximum value for its shareholders.

“Following a thorough and rigorous assessment of all relevant structural and ownership options, the Tabcorp Board of Directors has concluded that a demerger of the Lotteries & Keno business is the optimal and most certain path to maximise value for Tabcorpshareholders.”

Steven Gregg, Chairman, Board of Directors, Tabcorp

The demerger decision is also putting an end to the hopes of the likes of UK-based gambling group Entain, private equity firm Apollo Global Management, and Australian technology company BetMakers Technology Group, which all placed bids for Tabcorp’s media and gaming businesses.

Tabcorp outlined the uncertainty related to obtaining “legislative, regulatory, competition, racing industry and other third party approvals” and the “extended period of time” required for obtaining these approvals weighed against the sale of the Wagering & Media business.

Leaving the door open for “revised proposals that deliver sufficient value and certainty” for its shareholders, Tabcorp noted future engagement with bidders is still possible.

Two Separate ASX-Listed Companies

Subject to shareholder, court, regulatory and other approvals, Tabcorp is creating two standalone companies with distinct operating profiles, strategies, and opportunities for growth, which will be listed on the Australian Securities Exchange (ASX).

The first business company, Lotteries & Keno Co, will comprise of Australia’s leading lottery operator licensed to operate nationwide except in Western Australia (WA), as well as licensees of Keno products in New South Wales, Victoria, Queensland, South Australia, and the Australian Capital Territory (ACT).

The second entity, Wagering & Gaming Con, will include Australia’s leading omnichannel sports betting operator TAB, multi-channel sports broadcasting business Sky, Australia’s largest gaming services provider MAX, as well as established and profitable international businesses in both Europe and the US.

According to Tabcorp’s official announcement, the demerger will allow both businesses to benefit via optimization of capital structures, increased scale and diversification, close alignment to core operations and more focuses operating profile, the ability to utilize M&A in the future, as well as access to investors with a different set of investment criteria.

The demerger, which is expected to complete by the end of June 2022, will also allow both businesses to be valued on a standalone basis and take advantage of a potential re-rating and upside potential from future regulatory reforms and expansion opportunities.

The implementation of the demerger will be overseen by Tabcorp Chairman Steven Greeg and the Board of Directors and is projected to incur a one-off cost between AU$225 million ($173 million) and AU$275 million ($212 million), as well as ongoing annual incremental costs between AU$40 million ($31 million) and AU$45 million ($35 million).

Tabcorp Managing Director and CEO David Attenborough will remain in his position until completion of the demerger.

Lead Author

With 4 years experience as an analyst, Julie—or ‘Jewels’, as we aptly refer to her in the office—is nothing short of a marvel-worthy in her attention to the forex and cryptocurrency space as she quickly became the first pick to co-pilot education to the masses with Mike.

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