Apollo Makes Improved Offer for Tabcorp Wagering Division

Tabcorp, the Australian lottery and betting operator, has announced that it received an improved offer for its Media and Wagering division from Apollo Management, a global private equity giant.

The offer is worth 4 billion Australian dollars and is currently being considered by the Tabcorp board of directors. Last week, Tabcorp received an offer of 3.5 billion dollars for the wagering division from Entain, the British sports betting and gambling company which owns big international brands like Bwin, Coral, Ladbrokes, PartyPoker, and Sportingbet.

Evaluating the offer from Entain, analysts at J.P. Morgan, the famous global bank and investment company, came to the conclusion that the actual value of the Tabcorp wagering business would be 3.68 billion dollars, slightly higher than Entain’s offer.

The bid from Apollo Management surpasses that threshold and has a good chance of being accepted. However, the proposal would still have to clear a number of extra hurdles, including due diligence, financing, regulatory approval and consent from all relevant third parties.

Earlier this year, Tabcorp received several unsolicited offers for its Media and Wagering division. One of those offers came from Fox Corporation, the big U.S. media business owned by the Murdoch family. At the end of March, the Australian company decided to reject all offers and wait for improved ones. Tabcorp is valued at around 10 billion dollars, while the Wagering and Media division controls around 44% of the local sports betting and racing market.

Apollo is involved in several sectors and in companies all around the world, but lately it seems they are increasingly seeking to acquire significant stakes in gambling businesses. In September 2020 they made an offer to acquire William Hill but eventually lost the bidding war to Caesars Entertainment.

Then, in November, Apollo Management brokered an investment of half a billion euros in Sazka Group and also managed to acquire Great Canadian Gaming Corporation, a large land-based casino operator from Canada, for 3.3 billion Canadian dollars.

In December 2020, Apollo also managed to complete a deal to acquire a slice of International Game Technology, namely the company’s Italian B2C gaming machine, sports betting, and online gaming businesses, for just under 1 billion euros.

Their incursion into the gambling sector continued in March, when Apollo Management acquired the subsidiary companies that operate the U.S. properties of Las Vegas Sands, the gigantic conglomerate that operates several land-based casinos. That deal was worth around 2.25 billion dollars.

Source: . Tabcorp ASX Announcement. May 6, 2021.