The newly merged bookmaker entity Ladbrokes Coral is said to have plans of making a bid to take over Australian betting company Tabcorp Holdings. According to media reports, Ladbrokes Coral hired advisers after receiving regulatory approval for their merger to create a takeover proposal for Tabcorp. The tentative deal value has been placed at £2 billion (AUD3.3 billion).
Ladbrokes and Coral are two of the biggest UK bookmaker companies having a presence across sportsbooks, casino and poker. The two companies merged earlier this year in a £2.4 billion (AUD4 billion) deal which was approved recently.
Ladbrokes entered the Australian market in 2013 through an acquisition and is reporting revenue growth of almost 90 percent as per its third quarter results. The company had made an attempt to take over Tabcorp in late 2013 but that went flat after Tabcorp CEO David Attenborough rejected the idea. Tabcorp has entered the UK market through a joint venture with News Corp , launching their online venture Sun Bets .
The bid to grab Tabcorp by Ladbrokes Coral comes even as a merger between Tabcorp and its domestic rival Tatts Group a lottery giant is under discussions. Ladbokers Coral is reportedly not interested in acquiring the Tatts’ operation so it is seeking to place its bid before Tabcorp shareholders before they consider the merger with Tatts. Shareholders of Ladbokers Coral are likely to be wary of such a major strategic move immediately after their own year-long merger process.
Regulatory scrutiny is also likely to be significant, resulting in a lengthy process of review before the deal can get approved. Pursing a domestic merger to build up strength ahead of regulatory changes, Tabcorp recently acquired a stake of 10 percent in Tatts seen as a bid to keep rival takeover proposals at bay. The proposed A$11.3 billion merger between the two gambling giants in Australia would result in Tabcorp getting full control of the combined business.
The deal is yet to be approved by ACCC (Australian Competition and Consumer Commission) and there are speculations on whether the regulator would approve it given that it has previously rejected such attempts in the past. The merger is said to be an attempt to strengthen operations against foreign competition possibly in the wake of the gaming amendment bill that legislators in Australia are looking to make which will ban illegal betting operations .
These deals hint that the trend of consultation in gaming markets worldwide is continuing given the rising regulatory restrictions and taxes.