Australian gaming giant Tatts snubs Macquarie-led bid
Australian gaming and lottery giant Tatts on Friday snubbed a US$5.5 billion takeover bid from a consortium led by investment bank Macquarie, instead favouring a tie-up with rival Tabcorp.
Tatts and Tabcorp in October announced a merger to create an Aus$8.6 billion (US$6.6 billion) powerhouse taking bets on horse racing and sports events across Australia.
But the Macquarie-led consortium -- which also includes First State Superannuation Scheme, North Haven Infrastructure Partners and Kohlberg Kravis Roberts & Co -- made an unsolicited counter bid earlier this month.
Their proposal offered between $4.40 and $5.00 per Tatts share.
The Tatts board said Friday it had assessed the takeover proposal and concluded it was not superior to the planned merger.
"The board continues to believe that the proposed Tabcorp merger is in the best interests of Tatts shareholders and unanimously recommends (the merger) in the absence of a superior proposal," the company said in a statement.
It said it would not give the consortium access to its books for due diligence or engage in talks regarding their offer.
Tatts and Tabcorp -- both listed firms -- have pursued the idea of closer ties for years in a bid to cut costs and chase opportunities globally.
Tatts Group has a betting shop network in the states of Queensland, South Australia and Tasmania and also operates a lotteries business.
Tabcorp Holdings runs similar operations in Victoria and New South Wales, and has a broadcasting and media arm built around Sky Racing.
Both companies also compete in online gambling.
Tatts shares were 2.75 percent lower in early afternoon trade at Aus$4.43 following the announcement. Tabcorp was off 0.21 percent at Aus$4.74.