Wagering giant Tabcorp could be dusting off its stalled talks to merge with rival Tatts Group soon, after the two companies announced acquisition deals.
The Australian gambling operators had been discussing a merger back in November, which would have created a $9.4 billion betting behemoth, but the discussions fell through just days later because the two couldn’t agree on the terms of such a move.
Now, analysts are indicating that the negotiations could be revived soon as pressure from other competitors intensified.
If the deal pushes through, Deutsche analyst Mark Wilson estimates that that Tabcorp could pay up to AU$4.75 per Tatts share for 100 percent of the company, or about AU$80 million in synergies.”
Wilson was quoted by The Australian saying: “While both Tabcorp and Tatts confirmed that no further discussions are taking place between the parties relating to a merger or any other form of corporate transaction, we believe Tabcorp will continue to assess the merits of a merger or the acquisition of Tatts’ wagering business.”
Tabcorp announced recently that it is in talks to acquire gambling technology provider Intecq for US$128 million, a move that will see the wagering operator beef up its gaming services business. Tatts, on the other hand, is set to buy the local gaming monitoring operations of Intralot in a deal that could be worth between AU$90 million to AU$100 million.
The two gambling operators, according to analysts, are facing mounting pressure from the growing number of competition in the online corporate bookmaker market, which, in turn, has also raised regulatory concerns.
Tabcorp chief executive David Attenborough said the online wagering sector is facing a list of regulatory issues, such as taxation, online betting on live sports as well as the level of sports betting advertising.
On Thursday, Tabcorp reported that its profit fell by nearly half in the most recent fiscal year due to legal troubles and the launch of its UK-facing online betting site, Sun Bets.
