He’s known as a master dealmaker, so it is therefore important to look at what deals Gillon McLachlan could look to do – or is financially capable of doing – once he officially takes the helm of Tabcorp on August 5.
The former AFL chief executive clinched the biggest commercial and broadcast deals in Australian history while at the helm of that sport. And while ASX mergers and acquisitions are far more complex, McLachlan is entering an industry in which there are opportunities and where having scale means winning.
At the lower end, McLachlan and Tabcorp could look for bolt-on acquisitions such as ASX-listed Bluebet (which is merging with struggling Betr) or Pointsbet.
Tabcorp needs to do a better job wooing and then keeping digital punters.
Bluebet and Pointsbet both have decent technology and, in the case of the latter, have done a good job cashing in on the growing demand for betting on sports rather than just racing.
Pointsbet’s market capitalisation is about $150m and Bluebet about $60m, which will increase slightly once its deal with Betr’s owners is finalised.
One stumbling block is that Stake.com billionaires Edward Craven and Bijan Tehrani (their personal wealth is far more than Tabcorp’s $1.6bn valuation) now own 5 per cent of Pointsbet.
Tabcorp also has a 20 per cent stake into the privately owned growing social betting business Dabble, which it bought into in late 2022 for $33m.
Again, Dabble has good technology and also a fast-growing business in the US. A play for Dabble or at least a closer relationship with its young entrepreneur founders and board members – including young billionaire Tim Heath – may be a good idea for McLachlan.
Then there is the Australasian business of Entain Group, the owner of the Ladbrokes and Neds brands in Australia.
It was only three years ago that Entain lobbed an unsuccessful $3.5bn cash offer for Tabcorp’s wagering and media assets (how Tabcorp’s board would love that back), but now Entain’s London-listed parent is struggling.
Any combination with Entain would be scrutinised by competition regulators.
As with anything, any deals will come down to debt levels or scrip offers. Not helping McLachlan has been Tabcorp borrowing to pay dividends in recent years and a $600m payment to the Victorian government for a new wagering licence that is due on June 28 – to be funded from existing debt facilities.
Still, a master dealmaker can find a way.
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