Betmakers started 2021 as an ASX small cap. It just made a $4bn play for Tabcorp
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Tabcorp (ASX:TAH) has received an unsolicited offer from Betmakers (ASX:BET), the third such offer it has received in the past month for its troubled wagering business.
Betmaker wants to buy the Tabcorp’s wagering business for $4 billion, which is comprised of $1 billion cash and new shares in Betmakers.
It will be competing with two other offers that have been put on the table over the past month.
Earlier in May, global private equity Apollo proposed $3.5 billion to buy out Tabcorp’s wagering business, or $4 billion if it includes the gaming division.
In April, UK-listed sports betting company Entain, which owns bookmaker Ladbrokes, upgraded its offer for the wagering business to $3.5 billion from $3 billion.
The Tabcorp board is yet to announce its position in any of these offers.
Tabcorp’s wagering business has been under pressure from encroaching online competitors.
Sportsbet, Ladbrokes, and William Hill have gradually gained market share from Tabcorp’s huge network of retail outlets.
The division recently took a $25 million hit as a result of the COVID-19 lockdowns, but was offset by wagering revenues from the US election in November, which happens to be the single biggest betting book ever for Tabcorp.
The demerger of its wagering business, if it happens, would leave Tabcorp to become a pureplay lotteries company.
In this gaming segment, Tabcorp owns brands such as Lotto, TattsLotto, Powerball, and Lucky Lotteries.
This segment is also under pressure from other players, with the latest half showing a 51 per cent decrease in revenues from the pcp.
Betmakers is more of a technology play, as opposed to a gaming one.
The company does not accept bets or provide betting odds to punters. Instead, it provides the analytical data and technology to the wagering operators and gaming bodies.
In effect, it puts itself at the centre of the sports betting ecosystem, connecting gaming authorities with wagering operators globally.
After acquiring Sportech’s Tote and its digital businesses, the company now operates in more than 30 countries, servicing more than 200 bookmakers around the world.
Its latest first half revenue shows a 67 per cent increase to around $60 million.
Betmakers’ market cap has more than doubled since the beginning of the year to $1.2 billion.
However, its share price dipped by 10 per cent today, after the acquisition offer was announced.