The boss of UK wagering Entain has warned Tabcorp that their independent TAB business could end up far less than the money offered on the table by the time the demerging of the firms is completed.
Tabcorp, worth $11 billion, is weighing offers from three different firms to partner for its betting business. Entain put up a cash bid of $3.5 billion with the private equity group of Apollo.
An exciting offer from Matthew Tripp’s betting business BetMakers was revealed on Friday and is up to $4 billion with the splitting of the betting and lotteries division into two ASX-listed companies.
Speaking publicly upon the bid for the first time, Dean Shannon, Entain Australia’s Chief Executive said that Tabcorp should accept the $3.5 billion bid for the TAB betting and media business, or else Tabcorp will risk losing more grounds to online competitors if it decides to go for the demerging. Shannon runs Neds betting and Ladbrokes brands locally.
He said, “That’s going to take some time to play out, Tabcorp is losing market share. What’s it going to be worth by the time we get to the demerger? ”
“Our offer gives Tabcorp shareholders certainty. We are in this position where we could possibly buy Tabcorp wagering and media because the shareholders are sick of listening to promises and not having them delivered. ”
Many analysts and big investors believe that the demerger will most likely be the outcome because of the state racing bodies. In the case of Entain, the competition regulators are most likely the reason and the firm will need to sign off on a deal with another party.
But Shannon believes that the sale will quickly be finalized in less than 12 months. He claims that the $17.8 billion London-listed Entain is the best option to invest in the local racing industry, which gets its huge funding from the partnership with TAB.
He said, “They all know how supportive I have been of racing for the past eight or nine years.”
Shannon, considering the launch of FOX Bet, says that Ladbrokes will consider the brand just like any other competitors in the market. He questions Matthew Tripp’s simultaneous involvement in the FOX Bet launch and TAB bid.
“Which camp’s Matthew in and how’s that going to work for Tabcorp shareholders? “, he questioned.
Shannon also noted that improving Entain’s will be their major focus for tuning the business around. The firm could make more from its retail presence which includes 4000 pubs, hotels and clubs. Entain holds thousands of betting shops in the UK and Ireland.
Shannon says, “Thay have dropped the ball over the years. I don’t necessarily think they have marked their product well and I don’t think that they have kept up the product to what the customer is looking for.”