Tabcorp is understood to have engaged with Ladbrokes owner Entain and private equity firm Apollo Global Management in the past week, in what some are taking as a signal that a sale of parts or all of the business could now be more likely.
Tabcorp was expected to announce the outcome of its strategic review by Wednesday, according to sources, but that has now been delayed to Friday or early next week.
Bidders are understood to have been kept in the dark about Tabcorp’s intentions, but some believe that engagement with bidders suggests a sale is not off the table.
London listed sports betting and gambling company Entain is considered by many as strongly positioned to buy the group’s wagering and media unit given that strong synergies exist.
The group’s shares have been trading strongly, prompting some to expect to lift an earlier $3.5bn offer for the wagering and media unit. But the understanding is that any lift in its bid would only occur after conducting detailed due diligence on the unit.
DataRoom understands that a board meeting by Tabcorp to weigh a potential sale or demerger of its wagering and media unit was held last Wednesday and that the company was scheduled to release an announcement one week from that time.
Shares in companies related to gaming, wagering and lotteries are reaching fever pitch right now due to their defensive nature amid the pandemic, and following a period of government stimulus to prop up the workforce affected by Covid-19-related lockdowns.
On the table are cash offers from Entain and Apollo Global Management, along with a $4bn cash and scrip bid from ASX-listed BetMakers.
Entain is advised by Macquarie Capital and Morgan Stanley, while Tabcorp, which has lotteries, wagering and media and gaming divisions, is advised by UBS.
Private equity giant Apollo Global Management, working with Jefferies, has offered $4bn for Tabcorp’s wagering, media and gaming services arms, or $3.5bn for just the wagering and media divisions.
Tabcorp’s shares are trading at around $5.20.
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