Entain CEO Urges Tabcorp To Take His Bid to Avoid Risky Rivals
Posted on: May 31, 2021, 02:24h.
Last updated on: July 6, 2021, 04:24h.
Entain Australia CEO Dean Shannon, not surprisingly, believes his company’s $2.7 billion proposal for Tabcorp’s media and sports wagering businesses is the best in a growing field and is urging the operator to accept that bid.
Speaking publicly on the matter for the first time today, Shannon took aim at two competing offers for the Tabcorp units. That includes the $3.1 billion proposal from BetMakers revealed last week. He noted Entain is committed to growing those assets over the long haul — something rival suitors may not be able to commit to.
I think the offer is very ambitious. To me, it’s just still a bunch of promises,” said Shannon of the BetMakers pitch by way of the Australian Financial Review. “We’re not private equity. They’ll get the business and flip it. Matt Tripp’s a dealmaker and perhaps he’ll flip it at some point.”
Shannon’s quip about private equity refers to Apollo Global Management (NYSE:APO), which is offering $3.1 billion for the Tabcorp assets, including the gaming services unit. That business isn’t part of the strategic review being conducted by the Australian company. Strip it out of the equation and Apollo’s bid mirrors Entain’s.
Matt Tripp is a well-known Australian bookmaker and special adviser to BetMakers. He was previously involved with Sportsbet and BetEasy, which eventually became rivals to Tabcorp.
Entain Committed to Australia
Shannon is making clear Entain wants to build on its established footprint in Australia, noting his company wants to “own this business forever.”
Combining Entain Australia’s with Tabcorp’s TAB would create a horse racing and sports wagering behemoth — one with approximately 48 percent share in one of the world’s most active sports betting markets. It remains to be seen, but it’s possible the UK-based company has the inside track relative to Apollo and BetMakers.
Analysts expressed concern that the private equity firm’s lack of sportsbook operating experience could create unnecessary hurdles with Australian regulators. Regarding BetMakers’ proposal, it’s a mix of cash and equity, whereas Entain’s bid is all cash. In essence, Entain is offering Tabcorp shareholders a monetization avenue in which they rid themselves of businesses the current owner has promised to enhance, but to no avail.
Under the BetMakers’ scheme, Tabcorp investors retain ownership of the media and sports betting units, with no guarantees the new owner will perform any better than the current one. Tabcorp’s board of directors meets on June 20 and some clarity about the operator’s plans could emerge on that date.
Other Issues to Ponder
Adding to the intrigue are rumors that surfaced Sunday indicating News Corp Australia is in advanced talks with a group led by Tripp. It’s looking to form a new betting company and perhaps make a run at the Tabcorp assets.
Entain’s Shannon says that scenario creates “more questions than it answers,” because he’s simultaneously involved with BetMakers and News Corp.
That could lead to conflicts, whereas the Entain offer, as Shannon notes, delivers the clarity Tabcorp investors are looking for.
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Last Comments ( 2 )
Dude looks a bit like a SWEETFELLA
I think that $6.09 a share for the entire Tab, will come to an agreement with the board.