Tabcorp to spin-off two new ASX-listed companies, ending Betmakers' wagering offer

Gaming giant Tabcorp (ASX:TAH) has effectively rejected all bids for its wagering business today, after announcing that it will spin off its businesses into two seperate ASX-listed companies.

The announcement has put an end to Betmakers (ASX:BET) offer to buy Tabcorp’s wagering business announced in May.

Tabcorp says it intends to spin off its Lotteries & KenoCo business into a new ASX-listed company, after announcing a demerger of its wagering business earlier as part of its comprehensive strategic review.

The demerger is set create two standalone ASX-listed companies, Lotteries & KenoCo and Wagering & GamingCo, with distinct operating profiles and strategies.

The decision was made as sports betting has become one of the most lucrative sectors for ASX investors over the past 18 months.

Tabcorp’s wagering business is a leading omni-channel wagering operator and sports broadcaster, with international business in the USA and Europe.

The Lotteries & KenoCo business meanwhile, is currently Australia’s leading lottery operator with licences to operate in all Australian states and territories except WA.

“Following a thorough and rigorous assessment of all relevant structural and ownership options, the Tabcorp board of directors has concluded that a demerger of the Lotteries & Keno business is the optimal and most certain path to maximise value for Tabcorp shareholders,” Tabcorp Chairman, Steven Gregg said.

“Wagering & GamingCo will have national scale and reach, organic growth options, and potential upside from any future domestic structural reform and further international expansion,” he said.

The company said the strategic review had engaged all bidders for its Wagering & Media business, including Betmakers.

Bidding war for wagering business

In May, Betmakers became the latest company to make a bid on Tabcorp’s wagering business.

Betmaker said it wanted to buy the Tabcorp’s wagering business for $4 billion, which is comprised of $1 billion cash and $3 billion in new shares.

It was competing with two other offers that have been put in front of Tabcorp in the last few months.

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.

In the case of Betmakers, Tabcorp said today that it will continue discussions in relation to potential commercial opportunities in international markets.

Betmakers said that following this announcement, it will still pursue some sort of partnership with Tabcorp.

“Having received clarity from Tabcorp regarding the planned direction for its Wagering and Media business, BetMakers will continue discussions with Tabcorp regarding international opportunities, and we believe these opportunities have the potential to be significant,” said BetMakers CEO Todd Buckingham.

The Betmakers share price rose by as high as 10 per cent on the news today, while Tabcorp share price dropped by 4 per cent.