Investment bank Barrenjoey is understood to have been hired to work on options for the NZ TAB, which is likely to result in a quasi sale of the operation.
It comes after speculation emerged late last year that a deal could be on the agenda for the government-owned betting agency across the Tasman.
It is believed that on the table is a move to outsource the wagering operation to a party, resulting in a lump-sum payment for the racing industry.
The three most logical parties to be in contention are Tabcorp, Entain and Sportsbet.
Last year, New Zealand’s Racing Industry Transition Agency was expected to be under pressure to drive down costs and outsource the TAB to lift efficiency.
It comes after a report into the New Zealand Racing Industry launched in 2018 by John Messara that recommended sweeping industry changes.
The Messara Report, commissioned by the racing minister, recommended racetrack closures and an outsourcing of TAB operations.
Investec and Cameron Partners were hired by the then New Zealand Racing Board more than a year ago to gauge interest in outsourcing its wagering unit.
It comes after Australian listed wagering company Tabcorp is understood to have offered between $600m and $800m for the Western Australia TAB before the state government pulled the sale process last year.
The Western Australia government announced in November that its sale process for the WA TAB had been terminated, and the asset would be retained by the state.
A sale process for the state’s TAB – the only left in the country to be privatised – had been running for several months through Ad Astra Corporate Advisory.
The final parties in the competition were Tabcorp, the Matthew Tripp-led venture Betr and Ladbrokes owner Entain.
It is understood that Betr, now believed to be itself on the market, had submitted an offer slightly higher than $1bn for the WA TAB, but was unable to obtain funding for its offer.
There has been a suggestion that Entain also offered around $1bn early on, but had withdrawn its offer.
Mr Tripp, who invests in the ASX-listed BetMakers Technology Group, launched Betr on October 12 in a partnership with News Corp Australia – the publisher of The Australian – and Las Vegas-based Tekkorp Capital, where the ownership was split equally between the three parties.
Tabcorp is Australia’s largest wagering group and already operates TABs throughout the country except Western Australia.
Major synergies exist for a group owning more than one TAB because betting is dependent on the same systems and IT platforms that support the business.
Marketing also becomes an easier exercise.
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