Tabcorp, Australia’s lottery operator, will likely demerge its lottery from its gambling business. Almost all shareholders have approved the move and its fate is now up to the court.
Tabcorp’s Investors Approved the Demerger
Tabcorp’s plan is to establish its lottery business as a separate company called “The Lottery Corporation.” The investors were overwhelmingly in favor of the demerger, with 98.78% of them voting in favor of the process. Only 0.17% voted against while few remaining votes were open. The next step is to gain approval from the Supreme Court of New South Wales.
Tabcorp will speak with the court on 20 May and will try to finalize the demerger by May 23. If everything goes according to plan, the newly-founded Lottery Corporation will begin training on the Australian Securities Exchange a day later.
The Lottery Corporation will consist of most of Tabcorp’s Tatts business without the gaming services part. The core pillars of its strategy will be innovation, digital and retail expansion, M&A activity and enhanced customer experience. Meanwhile, the remaining part of Tabcorp will do business as New Tabcorp – a company that combines all of Tabcorp’s wagering services.
Everything Is Going According to Plan
Tabcorp first announced its demerger intention in July 2021. The announcement followed an earlier review of the company’s business that sought ideas on how to create more shareholder value. One of the propositions even envisioned the sale of Tabcorp’s wagering business to another firm.
Multiple esteemed companies, including Apollo Global, Betmakers and Entain proposed to acquire Tabcorp’s betting arm but the Australian company didn’t agree to their terms. Instead, Tabcorp opted to keep the business and demerge the lottery operations from it.
The court greenlit the demerger shareholder meeting in March, allowing investors to share their opinions on the matter. Now that it is clear that the latter are overwhelmingly supportive of the idea, Tabcorp will move forward with its plans.
Steven Greggs, the chairman of Tabcorp, spoke about the results of the voting. He shared that his team is delighted that the investors understand and approve of its vision.
We are pleased to have received shareholder approval for the demerger of The Lottery Corporation from Tabcorp. This is an important milestone in repositioning the group’s portfolio and setting up Tabcorp and The Lottery Corporation for future success.Steven Greggs, chairman, Tabcorp
In February, Tabcorp posted its results for the first half of the fiscal year. They demonstrated that the company’s lottery and keno operations helped it improve the price of its shares by 5%.