Australian wagering giant Tabcorp Holdings Limited says it expects to complete its proposed merger with Tatts Group by 1 November after the Supreme Court of Victoria last week ordered Tatts shareholders to cast their vote.
The meeting, to be held on 18 October 2017 in Brisbane, will see shareholders vote on the merger proposal via a Scheme of Arrangement, with the court to grant its approval should the vote return in the affimative.
Tabcorp has subsequently released its Scheme Booklet, including the results of an Independent Expert’s Report which finds that the merger is “in the best interests of Tatts shareholders in the absence of a superior proposal.”
“The Independent Expert referred to the fact that the value of Tatts shareholders’ collective interest in the combined group will be greater than their contribution of value to the combined group and the terms of the transaction provide a meaningful premium and payment for synergies and business improvements,” it said.
Tabcorp said it has calculated the implied value of the scheme consideration, based on the independent expert’s fundamental value of Tabcorp and Tatts plus a notional value for synergies and business improvements, at between AU$4.25 to AU$4.67 per Tatts share – representing a “significant premium” over the independent expert’s fundamental value of Tatts shares on a standalone basis of AU$3.68 to AU$4.00 per Tatts share.
Tabcorp added that it expects the transaction to deliver at least AU$130 million per annum of EBITDA from synergies and business improvements, which will be realized in the first full year following completion of the integration of the businesses. Integration of Tatts and Tabcorp is expected to take around two years to complete from the date of implementation, subject to the receipt of necessary regulatory approvals.
“The release of the Scheme Booklet represents another important step towards creating a world-class, diversified gambling entertainment group that is expected to deliver substantial financial and other benefits for both Tabcorp and Tatts shareholders, customers, business partners and other stakeholders,” said Tabcorp Chairman Paula Dwyer.
“Together we will be well placed to pursue more investment and innovation across all our businesses, including best-in-class digital products and experiences.
“With substantially all pre-implementation regulatory approvals now in place, we look forward to continuing to work with Tatts to successfully complete the Transaction and are expecting implementation to take place in November 2017.”
Tabcorp expects the merger to be completed by November despite the Australian Competition and Consumer Commission (ACCC) applying to the Federal Court for a judicial review of the Australian Competition Tribunal’s decision to approve the move.
The next court date is scheduled just six days after Tatts shareholders meet in Brisbane to vote on the deal.
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