Tabcorp Moves into Final Phase of Demerger; TLC to Start Trading June 2

Posted on: June 1, 2022, 09:27h. 

Last updated on: June 1, 2022, 09:40h.

Tabcorp is taking the final steps of its planned demerger. The Australian gaming company is in the process of splitting its various operations, with the next couple of days bringing everything to a close.

Tabcorp offices
Tabcorp’s offices in Australia. The gaming company is almost finished demerging its various operations. (Image: Tabcorp)

Tabcorp has executed the plan for The Lottery Corporation’s (TLC) demerger, according to a company announcement from today. The plan goes into effect as of today, and shareholders in TLC will receive holding statements on June 3.

Beginning tomorrow, TLC will start trading its shares on the Australian Securities Exchange on a normal settlement basis under the ticker TLC. The number of shares that are on issue is 2,225,771,703. The implementation of the scheme almost concludes the separation of Tabcorp’s lottery operations from its wagering, media, and gaming services.

Tabcorp Crosses the Finish Line

Tabcorp’s shareholders showed strong support for the demerger when they voted last month. and 98.78% of the votes supported it, with just 0.17% opposing it. Having crossed that hurdle, the Supreme Court of New South Wales approved the demerger shortly after as well.

The group submitted a copy of the court’s orders to the Australian Securities and Investments Commission (ASIC) on May 23. The plan will then be effective as of that date.

Tabcorp decided to keep its wagering business, but spun off the lottery activities, creating two distinct companies. One of these businesses became TLC. This is primarily all of the operations previously led by Tatts before Tabcorp acquired the company. TLC, however, doesn’t include the gaming services.

New Tabcorp, the second company to emerge after the split, includes those gaming operations, as well as wagering and media services. The shuffle comes after Tabcorp tried unsuccessfully to find a buyer for its wagering and media business.

Creating Value for Shareholders

Tabcorp share price dropped recently, but shareholders still stand to gain value. Tabcorp’s market capitalization was approximately $11.9 billion prior to the demerger. This figure is based on the number of issued shares and a $5.34 share price.

For every Tabcorp share owned, eligible shareholders receive one share of TLC stock. This means that there are 2,225,771,703 shares available for Tabcorp and TLC.

After the demerger, Tabcorp’s market cap is around $2.3 billion, taking into account fluctuations as the situation stabilizes. With TLC shares selling at around $4.63, it has a market cap of approximately $10.3 million. This creates $12.6 billion in combined market cap, which is $700 million, or 5.9% more, than Tabcorp’s value ahead of the demerger.

C-Level Changes Coming

Two new companies; two new sets of leaders. David Attenborough, Tabcorp’s former managing director and CEO, is going to retire. Adam Rytenskild will take over both of these positions.

In addition, Steven Gregg is retiring as chairman and non-executive director. However, he isn’t moving far, as he will assume both roles at TLC. For Tabcorp, Bruce Akhurst will become chairman.

Adam Newman, Tabcorp’s CFO, is switching seats to take the same position at TLC. Daniel Renshaw became Tabcorp’s CFO. Patrick McGlinchey, who was also the chief legal and risk officer of Tabcorp, is also switching to TLC, while Chris Murphy will continue to be Tabcorp’s company secretary.

Raelene Murphy, Brett Chenoweth, and Karen Stocks are now part of Tabcorp’s board as non-executive directors. In addition, Anne Brennan and Harry Boon resigned from the Tabcorp board to become non-executive directors of TLC.