KKR moves in on Tabcorp-Tatts merger
An eleventh hour bid by Pacific Consortium, which includes private equity firm KKR, Morgan Stanley’s infrastructure arm, Macquarie Group and First State Super, has crashed the party welcoming the proposed $11 billion merger between Tabcorp and Tatts.
With its sights on the Tatts’ lotteries business, the consortium has pitched an offer of $4.21 per share. The offer is worth $7.2 billion.
The offer is 1 cent higher than the $4.20 per share the Tabcorp’s bid but it’s totally strategic in this chess game.
It’s designed to get the consortium the right to do some due diligence on the business.
“This looks like it is clearly designed to get the board to give them due diligence. We now have the beginning of a bidding war,” Tatts Group shareholder Sandon Capital’s managing director, Gabriel Radzyminski told the Australian Financial Review.
Tatts group said it was undertaking a full analysis of the bids terms, assumptions and conditions and would provide an update to the market once the review was completed.
In the meantime, however, Tatts directors maintain shareholders will get more value from the Tabcorp offer and told shareholders to take no action.
Tatts Group shareholders are still waiting to see if regulators will give the nod to the Tatts-Tabcorp merger.
The consortium’s last bid was rejected by Tatts just before Christmas.
by Leon Gettler, April 20th 2017
