Tabcorp Holdings Ltd

Authorization granted for the proposed combination of Tabcorp and Tatts Group: Tabcorp Holdings Limited (ASX: TAH) has reported about the grant of the authorization for the proposed combination of Tabcorp and Tatts Group Ltd by Australian Competition Tribunal. The Tribunal was satisfied in all the circumstances for the proposed deal. However, the Tribunal’s decision to grant authorisation is subject to only one condition, being that TAH must divest its Odyssey Gaming Services business in Queensland. The Tribunal will publish the reasons for its decision on November 22, 2017. Meanwhile, TAH has already executed agreements with Australian National Hotels Pty Ltd for divesting the Odyssey Gaming Services business. It is noteworthy that the merger is said to be approved on the grounds that the combination is likely to benefit the groups and will deliver increased benefits to the racing industry on the whole. Even after getting approved earlier by the Tribunal, the matter was sent by the Federal Court (basis an appeal from Australian Competition and Consumer Commission and CrownBet), back to the Tribunal for a re-examination.
 
Now, the groups will be holding a scheme of arrangement meeting on November 30, 2017. Upon completion of the Scheme, existing Tatts Shareholders will own about 58.4% of the Combined Group while existing Tabcorp Shareholders will hold the remaining 41.6%. It has also been specified in the Scheme that Tabcorp will acquire all of the Tatts Shares and Tatts Shareholders (other than ineligible Foreign Shareholders) will receive 0.80 New Tabcorp Shares and $0.425 cash, less the amount of any Tatts Special Dividend, for each Tatts Share held. The value of the New Tabcorp Shares will depend on the price at which Tabcorp Shares trade on the ASX on or after the Effective Date.
 
Meanwhile, TAH stock has risen 19.65% in three months as on November 16, 2017, and was placed in a trading halt session before surging 4.8% on November 17, 2017 when the trading resumed with merger announcements.
 

EBITDA Comparisons (Source: Company Reports)

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