Tabcorp could be positioning itself to block a rival takeover bid for Tatts Group by significantly boosting its stake in the Australian lottery giant.
According to a report in The Australian newspaper, Tabcorp – which currently owns a 9% stake in Tatts Group – is considering upping its stake to the maximum allowable 19.9% in order to stave off an AU$5.4 billion bid from Pacific Consortium. There are no regulatory roadblocks to such a move, which would also give Tabcorp the power to vote down Pacific Consortium’s proposal.
Pacific Consortium includes the Macquarie Group, private equity firm KKR and Morgan Stanley’s infrastructure arm.
Tabcorp is currently planning its own AU$11 billion merger with Tatts Group and has been actively clearing the decks in recent months to ensure it can gain the necessary approvals, including selling off its slot machine monitoring business Odyssey Gaming Services to Australian National Hotels.
“Tabcorp has agreed to divest Odyssey as part of the process for securing competition approvals for the proposed combination of Tabcorp and Tatts Group Limited,” Tabcorp said at the time.
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