Steve McCann tipped as contender to become Tabcorp boss

Former Lend Lease CEO Steve McCann. Picture: Jeremy Piper

Speculation is mounting that the outgoing boss of construction and real estate group Lend Lease, Steve McCann, is in the mix of contenders to take the top job at Tabcorp.

Tabcorp, Australia’s largest wagering and lotteries company, has a market value of $11bn and sources are suggesting that the name of a new chief executive to take over from the role of David Attenborough will be announced as early as next week.

Also in contention is said to be Adam Rytenskild, who runs Tabcorp’s Wagering and Media division.

Meanwhile, some have suggested that AFL boss Gillon McLachlan was approached, although he is not said to be interested in taking on the role.

Lend Lease announced Mr McCann’s retirement in February, with the company’s head of Asia, Tony Lombardo, to assume the top job.

Known to be a keen horse racing and gambling enthusiast, Mr McCann has been at the $8.9bn Lend Lease for 16 years, 12 years of which were as chief executive.

He will retire on May 31.

Mr McCann’s leadership has largely been viewed positively over the years, although taking some of the shine over his performance at the highly complex and diverse real estate business has been the recent challenges that the company has faced with its engineering projects that have triggered major write downs and losses.

The engineering operations were secured as part of Lend Lease’s Bilfinger Berger acquisition for $960m in 2010 and much of that part of the business has since been sold.

Speculation remains about the appointment of Tabcorp’s new leader as the company remains in play, with a number of suitors including Apollo Global Management Labrokes owner Entain and a consortium headed by Matthew Tripp all making offers to buy parts of the business since the start of this year.

The company was due about two weeks ago to announce that it would launch a strategic review to consider a demerger of its wagering division and shareholders have since been left hanging, questioning the future direction of the group.

Working with Tabcorp is investment banker Kelvin Barry from UBS.

Shareholders have been lobbying Tabcorp to carry out a demerger of the business since last year, after expressing frustration over the company’s performance since it led an $11bn demerger with Tatts in 2017.

The hope was that Tabcorp’s management could boost the performance of the Tatts wagering unit, but the turnaround and integration of the business has taken longer than most had anticipated.

Some fund managers take the view that lotteries — considered the jewel in the crown — should be split from wagering, but the dilemma is where to put the Tabcorp gaming operations.

Apollo, advised by Gilbert + Tobin and Jefferies, put forward a cash bid for all components of Tabcorp except its lotteries division that was understood to be worth between $3bn and $3.5bn.

Entain, advised by Morgan Stanley and Macquarie Capital, offered $3bn cash for the Tabcorp wagering and media division, while keeping the door open for a potential alternative partial scrip offer.

Meanwhile, speculation suggests that Matthew Tripp, the Melbourne Storm executive chairman and BetEasy founder, has been touted as the likely party to run a demerged wagering arm.

The understanding is that the Tabcorp board has aspirations to achieve a price of at least $3.5bn for the wagering and media unit.

Tabcorp, advised by UBS, handed down a $185m net profit last month for the six months to December, down 7 per cent, as it wrestled with lockdowns amid the global pandemic.

The market expected Tabcorp to make an announcement on its plans for the division when it delivered its half-year results last month.

However, while delivering results, Tabcorp said its board would take time to consider relevant issues and strategic options that arise in respect of the proposals.