Tabcorp Holdings Ltd (Tabcorp) lately announced about the cash-settled equity swap entered with Tatts Group Ltd (Tatts) through which Tabcorp gets voting rights over 147 million Tatts shares at the back of an investment of $4.34 per share. This is indicative of a 10 per cent stake in Tatts. During the term of the swap, Tabcorp will receive payments equivalent to cash dividends paid by Tatts for the 147 million shares.
 
The announcement follows the October 2016 announcement of proposed merger of the groups. The deal is subject to regulatory approvals and will be under scrutiny by the Australian Competition and Consumer Commission (ACCC). The submissions relating to the transaction have to be made by December 23, 2016 while ACCC decision might come by February next year. Tabcorp’s latest move is said to add support to the proposed merger of the groups into a global gaming shark.
 
The move surely can be viewed as a strategy to bar entry of any third party influencing Tabcorp’s affiliation with Tatts by spoiling the $11 billion bid made by Tabcorp. Tatts’ stock price is up 7.12 per cent while Tabcorp’s stock price moved up 1.1 per cent on November 25, 2016 at the back of the latest stake announcement.

Enhanced portfolio of Licenses (Source: Company Reports)

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