TABCORP HOLDINGS LIMITED (ASX: TAH)

With ASX seen to slip on March 23, 2018 at the back of trade war fears flaring up, Tabcorp Holdings witnessed a stock price plunge of about 1% while the group announced that it has priced a new US$1.4 billion issue of long-term notes to investors in the US private placement market (Notes). The Notes are scheduled to be issued in June 2018 and are subject to customary conditions of the US private placement market. Further, US dollar proceeds from the Notes will be swapped into Australian dollars, yielding a funding of A$1.82 billion. Tabcorp intends to use the proceeds from the issue of Notes to fully repay the A$1.8 billion bridge financing facility, that has been established in view of the combination with Tatts Group and to repay existing bank debt.

It is worth noting that the combination with Tatts, has enabled Tabcorp to operate a portfolio of totalisator and fixed odds licences and retail wagering networks in South Australia, New South Wales, Victoria, Queensland, Tasmania, Australian Capital Territory and Northern Territory. Wagering products are now offered in approximately 4,300 retail venues, on-course at race tracks, online, via mobile devices and through call centres.

In February, Tabcorp Holdings’ wholly owned subsidiary, UBET SA Pty Ltd (UBET) was granted an extension on the retail exclusivity for its wagering licence in South Australia; and under the new arrangements that are yet to be approved by Independent Gambling Authority, the licence will be exclusive until the end of 2032.

Meanwhile, director Steven Gregg has acquired 20,000 Ordinary Shares under an on-market purchase and now has 35,000 Ordinary Shares held directly. Even, Vickki McFadden was reported to have gone for on-market purchase of 20,000 Ordinary Shares. While we have a “Hold” recommendation on the stock, it is interesting to note the developments of this wagering group.

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