Tatts Group Indicates Interest in Tabcorp Unit

Tuesday 16 March, 2010 18:12

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The third largest gambling company in Australia, Tatts Group, indicated interest in acquiring the gambling unit of Tabcorp Holdings.

Tatts is currently expanding its operations at a tremendous rate, having only this month agreeing to pay $850 million for the acquisition of New South Wales Lotteries Corp.

Speaking about the possibility of taking over Tabcorp's wagering unit, the Chief Executive Officer of Tatts, Dick McIlwain said: "I'd argue that it sits better with us than it does with them. We'd be interested in expanding our wagering business."

McIlwain said that this was not the first time that he had indicated interest in such an acquisition but had always come away empty handed.

"Over the years we've had some discussions," he said. "The most recent media I've seen on it says that Tabcorp are not going to exit wagering, so I don't waste my time chasing that."

Regarding affordability, the CEO admitted that it would be "a bite too much" to present Tabcorp with a takeover offer, considering that the massive group has a market value of a staggering $4.1 billion.

On the other end, Tatts reported first half earnings of $145 million . Its profits for the 2009 financial year were $277.44 million.

The purchase of the New South Wales Lottery Corp should produce around $120 million in earnings for Tatts by 2014, analysts believe.

Speaking after the purchase of the lottery, McIlwain said: "The company's acquisition of NSW Lotteries is a logical and natural expansion of its lottery businesses in Queensland, Victoria, Tasmania, Northern Territory and the ACT."

"The consolidation of state owned and Tatts lottery operations will drive significant operating efficiencies and offers considerable benefits from moving to a single operating system," he added.

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