Australia’s largest gaming company, Tabcorp Holdings, is just one court appearance away from completing an $11.3 billion merger with lottery operator Tatts Group.
Tatts’ shareholders overwhelmingly agreed to the takeover on Tuesday, voting 99 percent in favor of the move. Just a 75 percent vote in favor was required for approval.
The only detail that remains is an approval hearing on Wednesday before the justices of the Supreme Court of Victoria. It’s expected that the high court will give its blessing and the two companies will be one by Thursday.
Tatts CEO Robbie Cooke, who will lose his position when the acquisition is finalized, but said in Tuesday’s annual meeting the deal was the right move for the company.
“(It’s a) bittersweet moment to be leaving the business,” he said. “I can categorically say we are handing over to Tabcorp a suite of businesses that are in excellent shape.”
Long, Controversial Process
The merger will bring to an end a 14-month ordeal that began when the alliance was opposed by the Australian Competition and Consumer Commission (ACCC), as well as James Packer’s CrownBet. The Australian Competition Tribunal (ACT) authorized the deal in June, but immediately encountered objections from the two entities.
CrownBet, which owns three casino resorts in Australia, claimed the deal would create an unfair advantage to TabCorp and not be beneficial to gamblers. The ACCC contended that the ACT’s ruling that it would result in less competition was flawed.
Both groups requested that an appeals court hear the matter and rule against the merger. The court rejected their pleas in September and sent the case back to the tribunal to reevaluate the deal.
ACT president Justice John Middleton ruled in November that competition was not an issue and again approved the arrangement.
“The proposed merger is likely to result in substantial public benefits and the detriments identified by the ACCC and the interveners are unlikely to either arise or are not otherwise material,” Middleton wrote in his ruling.
“The tribunal is satisfied in all the circumstances that the proposed merger would result, or would be likely to result, in such a benefit to the public that the acquisition should be allowed to occur.”
Coming Together At Last
Tatts was coveted by Tabcorp was because it possessed the one gaming interest it didn’t have. Tatts has a firm grip on lotteries throughout the land Down Under, with brands in every territory except Western Australia. It has been providing lottery services for 134 years.
In 2016, the business consolidated its different games into a single entity entitled The Lott. In addition to the lottery, it also operates race and betting shops in several states in Australia.
Tabcorp, which has built its empire through four mergers since 1999 and has interests in everything from horse racing, video gambling machines, keno, sports betting, and television and radio stations. They tried to acquire Tatts two other times since 2006, but both attempts failed.