The Shareholders of Australia’s Tabcorp Holding Limited approved plans to demerge the company’s casinos business and gaming business. The demerger splits Tabcorp into two separate publicly listed companies on the Australian Securities Exchange.
According to the company’s senior management, splitting Tabcorp into casino and gaming businesses will make each business a more attractive takeover target. Once the deal is approved by the Supreme Court, the two companies will formally split next Wednesday.
Echo Entertainment Group will operate four of Australia’s premier casino and entertainment destinations: Star City in Sydney, Jupiters on the Gold Coast, Treasury in Brisbane and Jupiters in Townsville; while the wagering, gaming and keno businesses will continue at Tabcorp Holdings Limited.
Tabcorp Chairman John Story at the company’s General Meeting stated, “The separation of the companies will provide greater investment choice for investors, and will allow shareholders to evaluate separately the financial performance, strategies and particular characteristics of each business…In addition, the creation of two companies potentially enables each company to participate in any consolidation or corporate activity in their respective industries.”
Chief Executive and the mastermind behind the demerger, Elmer Funke Kupper, as a result of this demerger will find himself unemployed. He can’t be too upset, he’ll be given a $5.5 million payout and pretty much, a vacation. Kupper is expected to rejoin Tabcorp as a non-executive director in six months time.