Australia’s Tatts Group Limited and Tabcorp Holdings Ltd are in talks to create a A$9.34 billion ($7.1 billion) betting industry giant, in hopes of fending off popular online rivals.
Australia’s Largest betting companies Tatts Group Limited and Tabcorp Holdings Ltd. are in talks of a potential merge that could result into the creation of a betting industry giant worth $7.1 billion. However in almost identical statements, the companies have requested that trading halt until the market opens on Wednesday. They have declined to comment further.
Australia’s two largest non-casino gambling firms have been experiencing difficulties in coping with the mounting competition other online betting agencies have been providing since the deregulation of gambling licenses in 2012. Brisbane-based Tatts, who has 135-year-old behind its back and whose name is synonymous with lotteries in some parts of Australia, has a market capitalization of A$5.3 billion. Melbourne-based Tabcorp, Australia’s biggest betting company on the other hand, has a market value of A$4.1 billion.
The companies provided no details of the merger’s structure, but Deutsche Bank analysts estimated Tabcorp could pay up to A$4.75 per Tatts share in a deal that would boost Tabcorp’s earnings per share by 1 percent.