Tatts Group receives Pacific Consortium's takeover offer

Australian lottery operator Tatts Group Ltd TTS.AX on Wednesday said it had received a A$6.15 billion ($4.65 billion) cash takeover proposal from a consortium backed by US private equity firm KKR & Co KKR.N , threatening an agreed merger with Tabcorp Holdings Ltd TAH.AX .

Tatts said on Wednesday that it is assessing the new proposal from Pacific Consortium and advised shareholders not to take any action yet in relation to it.

- The company said its board was comparing the all-cash proposal, which is worth A$4.21 a share, to an agreed cash-and-shares offer from rival Tabcorp Holdings.

Tatts said the cash offer may include a fully-franked special dividend of up to 25 cents per share.

The bid is for 100 per cent ownership of Tatts at $4.21 per share, which equates to an approximate value of Tatts at $7.2bn.

Tatts said the terms of the Pacific Consortium proposal showed the group had obtained indicative equity commitments of A$4.6 billion and conditional debt financing for the remainder.

"We would like to see Tatts grant due diligence", Gabriel Radzyminski, managing director of activist investor Sandon Capital said.

Representatives of Tatts, Tabcorp and the KKR-backed Pacific Consortium declined immediate comment. The consortium's offer is all-cash, which does not require regulatory approvals.

Tatts shareholders would receive 0.8 Tabcorp shares and 42.5 cents in cash for each Tatts share held. It had an earlier proposal, in cash and shares, rejected by the Tatts board in December.

A buyout consortium has made a fresh attempt to gatecrash the betting group's takeover by rival Tabcorp.

Tabcorp and Tatts announced in October a year ago that they meant to merge to create a world-class diversified gambling group with an enterprise value of about $11.3 billion. Tatts had earlier agreed on a takeover offer from Tabcorp, which plans to create an $11 billion gaming giant by merging the two companies.

Shares in Tatts are down nearly 3% year to date.

  • Zachary Reyes