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Tabcorp Holdings Ltd. Drops Bid After ACCC Rejection
Tabcorp Holdings has withdrawn its strong AU $1.9 billion bid for Unitab after the Australian Competition and Consumer Commission (ACCC), the competition watchdog in Australia, rejected it. The ACCC claims that Tabcorp's proposed takeover of Unitab could only pave the way for unhealthy competition in the gambling industry in Australia, with Tabcorp virtually owning all of the major totalisators.
In reaction, Tabcorp Managing Director Matthew Slatter stated, "Tabcorp disagrees with the decision of the ACCC but will not challenge the ruling."
Now Tattersall's "merger of equals" bid for Unitab is almost certain.
Nonetheless, analysts are short of asking Tattersall's to defer celebration of victory. After all, the Unitab shareholders and CEO are not as content with their bid as the Board has claimed it is.
Observers are saying that Tattersall's offer do not give Unitab a lot of control in the business unless it increases its bid.
Unitab's CEO, Dick McIlwain, has previously said that Tabcorp's bid of $14.25 a share was not easily acceptable. Apparently, Kevin Seymour, Unitab's largest individual shareholder agrees with McIlwain's assessment, "Dick's pretty astute in calculating the worth of the company and I wouldn't disagree with that".
Tattersall's, however, has yet to issue official statements to react to the call for an increase in its offer.
Tattersall's operates over 13,400 gambling game machines in Victoria. In 2005 alone, the Tabcorp rival has sold $1.2 billion worth of lottery tickets.
31 January 2007
News Submitted by:
Jessica Kellerman
