Tabcorp-Tatts tie-up talks falter

The hopes of gambling giants Tabcorp and Tatts for a quick end to their year-long merger saga have been dashed.

Yesterday’s ruling puts the merger on track to be completed by December 31.

The hopes of gambling giants Tabcorp and Tatts for a quick end to their year-long merger saga have been dashed.

A shareholder meeting to ­approve the $11 billion hook-up was yesterday pushed back ­despite a legal win.

Ignoring pleas from the competition watchdog and James Packer-backed corporate bookmaker CrownBet, Competition Tribunal president John Middleton yesterday granted Tabcorp a speedy re-hearing of its application to approve the merger.

However, the dates of the hearing, October 24 and 25, fall after a meeting where Tatts shareholders are to vote on the deal scheduled for October 18, and clash with the date by which the company hoped to get court approval, October 24.

The meeting and court approval date will need to be rescheduled, Justice Middleton said.

“This is unavoidable because the tribunal must consider all matters that need to be considered now that the matter is back before the tribunal,” he said.

Justice Middleton said the ­tribunal would “endeavour to make a decision one way or ­another immediately”.

Tatts told its shareholders, in a statement to the Australian market last night, that it was now reviewing the date of the scheme meeting which had been scheduled for October 18.

It is understood that the opportunity for shareholders to vote on the deal could now be pushed out by several weeks but Tabcorp and Tatts were still confident of completing the deal by the end of the year.

“Tatts will continue to work with Tabcorp to progress the competition approval process,” Tatts said.

Tabcorp also updated the market late yesterday, confirming it would lodge a new application, for approval of the deal, with the tribunal.

A Tabcorp spokesman said it would continue to work with Tatts to find a new date for the meeting.

Yesterday’s ruling puts the merger on track to be completed before December 31, when Tabcorp’s offer expires, as long as there are no further legal challenges.

This is because parties to the tribunal have 28 days to appeal any ruling to the Federal Court, which would be difficult for it to hear before the end of the year.

A re-hearing by the tribunal is necessary because of a Full Federal Court finding that an earlier decision by the tribunal waving the deal through with minimal conditions was void because of a legal error.

The court ruling left Justice Middleton unsure whether the ­tribunal had the power to reconsider its original decision.

He said yesterday he had formed the view that he did have the power — but to ensure the process would be bulletproof he suggested Tabcorp make a fresh application, to be heard at the same time as the re-hearing of the original decision. “This is not a new issue to confront lawyers,” he said. “We could debate it and spend a lot of time on it.”

He said that arguments against going ahead would have to be “very strong”. “If I haven’t got ­jurisdiction your client takes a big gamble — it’s the business it is in,” he told counsel for Tabcorp, ­Cameron Moore SC. “A practical way is for this matter to proceed on the basis that this tribunal has jurisdiction and another application be brought concurrently.”

He said evidence from the previous hearing would need to be updated. “We’ve got to proceed as quickly as we can but with all due process,” he said.

He flagged he might restrict the ability of intervening parties, including CrownBet, to cross examine witnesses.

Tabcorp brought the merger to the tribunal, bypassing the ACCC, in March. The tribunal has a three-month time limit to decide cases, but in June Justice Middleton extended this by another three months until September 10.

Judgment, allowing the merger to go ahead on the condition one small business was sold, was handed down in March.

However, the ACCC, which during the hearing decided to ­oppose the merger, appealed to the Full Federal Court on what its chairman Rod Sims said were three points of law important to the way the regulator conducted its own internal approvals process.

Last week, the court found for the ACCC on one point.

The court said the tribunal’s decision was void ab initio — from the ­beginning — sparking yesterday’s legal argument over whether a fresh application needed to be made.