Tabcorp’s Lottery & Keno Demerger Greenlit by Court

At the end of March, Australia’s lottery operator Tabcorp announced its lottery and keno demerger will be subject to a shareholder’s vote. On May 12, its shareholders showed overwhelming support for the proposal, with close to 99% of all votes expressed during the general meeting favoring the demerger, around 0.17% of votes going against it, and 0.89% open votes registered. Today, the operator’s fate was finally decided in court. The Supreme Court in New South Wales announced the demerger of the operator’s lottery operations from its media, gaming, and wagering services. The next step will see the operator submitting a copy of the court’s order to the Australian Securities and Investment Commission on May 23.

Tabcorp Reviewed Its Operations in 2021

The newly demerged company will be called The Lottery Corporation and its shares should start trading on the Australian Securities Exchange starting May 24. The company will also have a different location for its establishment. Australia’s lottery operator’s securities will also be traded as former demerger entitlements starting May 24.

The first time the operator made its intention to spin off its keno and lotteries division public was in the summer of 2021 after it had its operations thoroughly reviewed a few months earlier. The review also assessed alternatives for the operator’s ownership and structure in an attempt to add extra value for shareholders. The idea of selling its media and wagering business was also discussed during the review. Tabcorp received unsolicited proposals, including an AU$3.5 billion ($2.44 billion) bid from Entain and a $4 billion ($2.79 billion) offer from Apollo Global and Betmakers. Tabcorp refused to accept any of the proposals, stating they misrepresented the true value of its keno and lottery branches.

The Operator Kept Its Wagering Division

At the end of the review, the operator decided to hold on to its wagering business, while planning the spin-off for its lotteries business, creating two distinct companies. One of the companies was renamed New Tabcorp and it would include all of Tabcorp’s media, wagering, and gaming services. As previously mentioned, the second business called The Lottery Corporation will be listed on the Australian Stock Exchange and it will handle the keno and lotteries division. Tabcorp’s chairman Steven Gregg explained that the board decided to opt for the demerger as the most suitable way of maximizing the value for shareholders while enjoying fewer legislative obstacles.

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