SYDNEY (Australia): Australian gaming and lottery giant Tatts on Friday snubbed a US$5.5 billion takeover bid with a consortium led by investment bank Macquarie, instead favouring a tie-up with rival Tabcorp.
Tatts and Tabcorp in October announced a merger to develop an A$8.6 billion (US$6.6 billion) powerhouse taking bets on horse racing and sports events across Australia.
But the Macquarie-led consortium – keeping up with includes First State Superannuation Scheme, North Haven Infrastructure Partners and Kohlberg Kravis Roberts & Co – made an unsolicited counter bid earlier this year.
Their proposal offered between $4.40 and $5.00 per Tatts share.
The Tatts board said Friday it had assessed the takeover proposal and concluded it had not been better than the planned merger.
“The board is constantly assume that the proposed Tabcorp merger is within the desires of Tatts shareholders and unanimously recommends (the merger) in the absence of a first-class proposal,” the firm said within a statement.
It stated it won\’t provide consortium entry to its books for due groundwork or take part in talks concerning offer.
Tatts and Tabcorp – both listed firms – have pursued the idea of closer ties for several years from a bid to remove costs and chase opportunities globally.
Tatts Group contains a betting shop network in america of Queensland, South Australia and Tasmania and in addition operates a lotteries business.
Tabcorp Holdings runs similar operations in Victoria and New South Wales, and contains a broadcasting and media arm built around Sky Racing.
Both companies also compete in online gambling.
Tatts shares were 2.75% with a lack of early afternoon trade at A$4.43 adopting the announcement. Tabcorp was off 0.21% at A$4.74.