The art of the deal: Paula Dwyer, chair, Tabcorp

If you’re tackling a deal, never approach it with arrogance, says Tabcorp’s boss.

Paul Dwyer. Illustration: Johannes Leak.

Tabcorp chair Paula Dwyer faced some big challenges as the company’s bid to become a $10 billion gaming behemoth stretched over 14 months in 2016 and 2017. But Dwyer says her key role was to keep her team focused and stop individuals getting in the way of achieving the deal.

It was no easy task, with the Australian-listed Tabcorp’s battle to take over Tatts Group proving a bumpy ride. Dwyer’s board was forced to fight off a rival bidder, see off appeals to competition approval, and convince stakeholders they would benefit from the creation of a gaming giant.

As the challenges increased, Dwyer dug in: she says she is not a leader who is fussed about hurdles along the way.

“Every female leader has had to navigate things differently to be successful,” she says. “That is a great strength in female leaders, the ability to think differently in terms of problem solving.”

Dwyer says the transaction, completed in December last year, was unique in terms of the complexity, the multiplicity of stakeholders and a strong belief being peddled by doubters that the deal would not succeed.

She says an unwavering focus on the size of the prize steered her board through those 14 months.

“To make it happen we needed to have a strong sense of conviction that this was the right thing to do,” she says. “Along the way there were so many roadblocks and issues that arose and we could only navigate that by being fully engaged. We always kept an eye on the final goal, and did not get distracted by noise, emotion or intervention. My job was to keep people focused on the goal rather than the irritation of the process.”

Despite the travails, Dwyer says the exercise was fun: “I like problem solving and it was one of those things where you could really influence the outcome. The idea of the merger had been around for a long time; everyone thought it had compelling industrial logic, but it was just the terms upon which one could do it. To be able to have our company lead it was fantastic.”

‘Over the course of the deal there were many crisis calls and regular checks to ensure that everyone knew what they had to do.’

A combination of Tabcorp and Tatts has long been talked about but there was also the belief that it was impossible. Dwyer says there had been productive talks between the companies for years and Tabcorp had always maintained a watching brief on the potential before finally picking a moment when it suddenly became doable.

“In previous interactions we weren’t in the driving seat, and we didn’t believe that past proposals would optimise the value in the long term for our shareholders and all our stakeholders,” she says. “Whenever we proceeded down the path of a discussion, an impediment was always the relative financial contribution of each of the entities, because Tatts was the bigger company, with a higher multiple and more diversified earnings stream.”

Over the course of the deal there were many crisis calls and regular checks to ensure that everyone knew what they had to do, that they had done it and that people were held to account through the process. “For a transaction with the duration ours had, plus the public interest and the multiple stakeholders, it was important that people stayed focused and did what they said they were going to do,” Dwyer says. “We thought through scenarios and challenged ourselves to contend with various outcomes so nothing was a surprise along the way.”

The team was well prepared but Dwyer says it could not have predicted the process as it unfolded, including the time it took, the various interested parties and a rival bid.

“In each issue that came up, we got the leadership group together and decided on our tactical response and then implemented it,” she says.“No one went rogue; it was a collective leadership team.”

As they crossed hurdles, the board grew more confident.

Says Dwyer: “We always had a strong sense of belief that this was the right thing to do for the company. We were also strongly of the view that we had to be respectful of the process and any interveners. Everyone had a right to examine this transaction because of its complexity and significance.”

Her advice to those tackling a deal is to never approach it with arrogance.

“If someone has a different opinion, you have to respect that,” she says. “I always approach things in life with [the idea that] you have to listen and understand and then test your own thinking. There is more than one way to achieve your goal. If you keep your eye on the goal you have to be flexible in the tactics.”

The Tabcorp chairman says she is incredibly proud that the deal was successful and the company now has the opportunity to build a “world-class, robust” competitor in gaming.

“The future for Tabcorp is much clearer now having completed this merger. We have a fabulous opportunity now to build a global gaming company.”