sportznut
23rd April 2004, 06:33 PM
From news.com.au:
Victoria's Tabcorp punts on Tab
April 23, 2004
THE long-running bidding war for NSW's Tab Ltd has ended, with Queensland-based UNiTAB Ltd today effectively pulling out of its bid. Instead, wagering group UNiTAB has made a deal with its Victorian rival Tabcorp, which is now the only player left with a bid for Tab.
Under the agreement, if Tab shareholders approve Tabcorp's bid, Tabcorp will sell off parts of its business and the Tab business to UNiTAB. UNiTAB's managing director Dick McIlwain said it was an opportunity too good to ignore. "It will deliver a better outcome for UNiTAB shareholders than would have resulted from our bid for Tab," he said in a statement.
A trading halt in UNiTAB and Tabcorp shares was lifted straight after the announcement, and both jumped about four per cent higher. At 1410 AEST, UNiTAB shares were up 26 cents at $6.75 while Tabcorp shares were 47 cents higher at $12.66. Tab shares remain in a trading halt. They last traded at $4.70.
Commsec gaming analyst Derek Francis said the initial shareholder reaction reflected his own first impressions of the announcement. "It's good for both UNiTAB and Tabcorp," he said. "It's probably bad for Tab NSW because it decreases the bidding pressure." Both Tabcorp and UNiTAB's bids had valued Tab roughly at about $4.50 a share.
Under the deal between UNiTAB and Tabcorp, Tab's gaming business will be sold to UNiTAB for $175 million. The gaming business involves the NSW jackpot business, Tab's centralised monitoring system business and Tab's maxvision business. NSW Government rulings had meant this part of the Tab business would have to be spun off anyway by whoever had won the bid.
Also as part of the deal, Tabcorp will sell its own centralised monitoring system business to UNiTAB, as well as the jackpot services business operated in hotels and clubs in Queensland, for a total of $40 million. A third tranche of the deal centres upon Tab's Sky Channel - the televised racing service. Tabcorp would become the new owner of Sky Channel under a merger with Tab.
If that merger happens, Tabcorp has agreed to procure amendments to extend the term of the agreements UNiTAB has with Sky Channel in Queensland, South Australia and the Northern Territory. Tabcorp would also allow UNiTAB to fix the fees for that service so they won't rise by more than three per cent or CPI.
Finally, UNiTAB's current agreements with Tabcorp for the provision of fixed odds book management services have been extended until 2008 with an option for UNiTAB to further extend until 2013.
It is now up to Tab shareholders to decide whether to accept or reject Tabcorp's bid. The deal between UNiTAB and Tabcorp is subject to Tabcorp acquiring at least 50 per cent of Tab's shares. Tabcorp has already sent its bidder's statement to Tab shareholders, and today indicated it would not be altering its bid, which a spokesman said was "fair and reasonable" and "fully priced".
AAP
Victoria's Tabcorp punts on Tab
April 23, 2004
THE long-running bidding war for NSW's Tab Ltd has ended, with Queensland-based UNiTAB Ltd today effectively pulling out of its bid. Instead, wagering group UNiTAB has made a deal with its Victorian rival Tabcorp, which is now the only player left with a bid for Tab.
Under the agreement, if Tab shareholders approve Tabcorp's bid, Tabcorp will sell off parts of its business and the Tab business to UNiTAB. UNiTAB's managing director Dick McIlwain said it was an opportunity too good to ignore. "It will deliver a better outcome for UNiTAB shareholders than would have resulted from our bid for Tab," he said in a statement.
A trading halt in UNiTAB and Tabcorp shares was lifted straight after the announcement, and both jumped about four per cent higher. At 1410 AEST, UNiTAB shares were up 26 cents at $6.75 while Tabcorp shares were 47 cents higher at $12.66. Tab shares remain in a trading halt. They last traded at $4.70.
Commsec gaming analyst Derek Francis said the initial shareholder reaction reflected his own first impressions of the announcement. "It's good for both UNiTAB and Tabcorp," he said. "It's probably bad for Tab NSW because it decreases the bidding pressure." Both Tabcorp and UNiTAB's bids had valued Tab roughly at about $4.50 a share.
Under the deal between UNiTAB and Tabcorp, Tab's gaming business will be sold to UNiTAB for $175 million. The gaming business involves the NSW jackpot business, Tab's centralised monitoring system business and Tab's maxvision business. NSW Government rulings had meant this part of the Tab business would have to be spun off anyway by whoever had won the bid.
Also as part of the deal, Tabcorp will sell its own centralised monitoring system business to UNiTAB, as well as the jackpot services business operated in hotels and clubs in Queensland, for a total of $40 million. A third tranche of the deal centres upon Tab's Sky Channel - the televised racing service. Tabcorp would become the new owner of Sky Channel under a merger with Tab.
If that merger happens, Tabcorp has agreed to procure amendments to extend the term of the agreements UNiTAB has with Sky Channel in Queensland, South Australia and the Northern Territory. Tabcorp would also allow UNiTAB to fix the fees for that service so they won't rise by more than three per cent or CPI.
Finally, UNiTAB's current agreements with Tabcorp for the provision of fixed odds book management services have been extended until 2008 with an option for UNiTAB to further extend until 2013.
It is now up to Tab shareholders to decide whether to accept or reject Tabcorp's bid. The deal between UNiTAB and Tabcorp is subject to Tabcorp acquiring at least 50 per cent of Tab's shares. Tabcorp has already sent its bidder's statement to Tab shareholders, and today indicated it would not be altering its bid, which a spokesman said was "fair and reasonable" and "fully priced".
AAP