Merger Talks Between Tabcorp And Tatts Break Down
Following last week’s rumors of a merger between Tatts Group and Tabcorp, it has been announced that the merger is off. The two gaming giants have a combined marketing cap of $9.4 b and the idea was to combine forces in order to compete in the increasing competitive Australian gambling market.
The talks reportedly failed as both parties failed to agree on terms. Tabcorp issued a statement saying they,“no further discussions taking place between the parties relating to a merger or any other form of corporate transaction.” Tatts issued its own statement saying the parties had been “unable to reach agreement on key transaction terms, in particular as it relates to a nil-premium exchange ratio.”
Both Tabcorp and Tatts Group are facing stiff competition from foreign online operators like William Hill, Ladbrokes and bet365. Tabcorp operates TAB outlets in ACT, NSW and Victoria. Tatts Group has gambling operations on Tasmania, Northern Territory and Queensland.
Market experts were not surprised at the failure of the talks as Tatt shareholders were not offered cash or share incentive to merge with Tabcorp.
OptionsXpress market analyst Ben Le Brun said,” It’s back to the boards of each to see if they can come up with something sweeter, or they’ll have to go it alone or look for other merger and acquisition opportunities.”
Both companies announced that there were no further negotiations planed in the future.