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Tabcorp allays investor fears over Tatts merger

Wed, Oct 26, 9:30am by Staff Writer

Tabcorp insists that shareholders have nothing to fear from the $11.3 billion merger with chairman Paula Dwyer describing the deal as representing ‘absolutely compelling value’.

The biggest merger in the history of the Australian gambling sector seems to have an unstoppable momentum behind it after both boards approved the deal last week.

However, while Tatts shareholders get to vote on the deal because of its nature, Tabcorp shareholders don’t get the same rights, which caused some unrest at Tuesday’s Tabcorp AGM.

Dwyer, who would be chairman of the new combined entity, said there was great value for Tabcorp investors in the deal and there should be no concerns.

“The deal is absolutely compelling value for Tabcorp shareholders,” she said. “The method of affecting the deal is through a Tatts scheme of arrangement so the Tatts shareholders vote on it. The other issue around should shareholders generally be required to vote on transactions is a matter for the regulators.”

The deal still requires regulatory approval and will undoubtedly come under the eye of the Australian Competition and Consumer Commission. The strongest objection will likely come from others in the gambling and wagering sector, who fear the combined entity will completely dominate the industry.

Dwyer also dismissed any talk that a merger may only be contingent on Tatts selling off its lotteries business, as had been suggested by some Tatts shareholders.

“There’s absolutely no intention that if this transaction is completed that we will be selling off the lotteries.”

“There’s a long way to go. There’s lots of regulatory approvals that are required, but we are optimistic and confident that he deal will get through,” she said.

The next milestone for the merger will be on Thursday when Tatts Group hold their AGM in Brisbane, where the deal will be voted upon.

The other concern Dwyer and the Tabcorp board faced at the AGM was a backlash over its executive pay structure.

Chief executive David Attenborough was paid $3.19 million in 2015-16, up from $2.73 million the previous year.

However, a ‘strike’ action was not activated, with only 22 per cent of shareholders supporting action against the long-term incentives structure.

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