The new operator of the West Australian TAB licence is set to be finalised within days, with Ladbrokes’ owner Entain out of the competition after failing to be given preferred bidder status. As The Australian reported on October 10, Matthew Tripp’s new vehicle Betr – which launched this month – is the frontrunner for the lucrative licence.
But ASX-listed Tabcorp is not out of the contest quite yet.
The question is how much Betr or Tabcorp can stomach paying for the licence. Sources believe at least one of the final bids was over $1bn. While Betr – which is part owned by News Corp Australia, publisher of The Australian – is the preferred bidder, there is a need to finalise funding. Despite significant speculation, Seven West is not part of the consortium.
It would also be a big call for Tabcorp at a time when debt markets are becoming increasingly pricey.
Entain’s market value has almost halved in the past year to £6.93bn ($12.3bn) and some believe it was behind the pack on price in the WA contest. The London-listed company is also being investigated by Austrac over its responsibility to combat serious and organised crime for at least four years,
Entain bid about $3.5bn for Tabcorp’s wagering arm last year, but its offer was rejected. If it had acquired the WA TAB and Victoria racing licences, it could have built scale without buying Tabcorp. Its exit from the WA TAB race makes a pursuit of Tabcorp more plausible.
If Tabcorp misses out on the WA TAB, its share price could fall, making a deal more viable.
Final bids for the TAB were submitted in August and an announcement is due any day.
Tripp launched Betr this month in a partnership with News Corp, Las Vegas-based Tekkorp Capital and ASX-listed BetMakers Technology.
The delay in announcing the outcome of the WA TAB sale process is due to the government approval needed for a privatisation of the asset. Ad Astra Corporate Advisory is advising the WA government.
Expressions of interest for the $400m-plus Victorian racing licence were received in August from a raft of contenders.
Bidders included Tabcorp, Entain, the interests of Mr Tripp, PointsBet Australia and some private equity firms.
The licence expires in 2024 and is up for renewal. It is held by Tabcorp after being issued to the group by Victoria Racing for $410m in 2012.
Tabcorp was in a 50-50 joint venture with the Victorian racing industry, comprising Racing Victoria, Harness Racing Victoria and Greyhound Racing Victoria.
The licence gives Tabcorp the opportunity to conduct on and off-course wagering and betting across the industry, along with approved sporting and other events in Victoria.
This is in addition to the right to conduct the simulated racing game Trackside.
Shares in Tabcorp closed 2c higher on Friday at 96c, taking its market value to $2.2bn.
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