Entain has increased its bid for Tabcorp’s sports betting, horse racing, and media arm. The UK betting giant tabled an offer of $3 billion (US$2.3 billion) in February but has now decided to up the ante and increase that bid to $3.5 billion (US$2.7 billion).
A Bid to Dominate the Australian Betting Market
Tabcorp’s Wagering & Media department is considered the last piece of Entain’s puzzle in Australia. The London-listed company already owns Ladbrokes and Neds and if it is successful in its Tabcorp bid, it will definitely become the largest player on the Australian sports betting scene in which it is competing against the likes of Flutter Entertainment and its super-popular Sportsbet sportsbook.
Tabcorp’s sports wagering arm holds 43.7% of the Australian horse racing and sports betting market, whereas Entain currently holds only about 4% of the same market courtesy of the operations of its Ladbrokes and Neds sportsbooks.
If Entain manages to purchase Tabcorp’s sports betting and media division, it will be a big victory for the UK wagering behemoth. The Australian sports betting market is a very competitive one, and if Entain owns three large Australian sportsbooks, it will represent a huge success for the company.
Tabcorp to Review the New Offer
Tabcorp rejected the $3 billion February bid because they felt that Entain did not “adequately value Tabcorp’s Wagering & Media business.” The company said that they would do the same with the new offer.
In an official statement, Tabcorp announced that it had received a revised proposal and that they were now reviewing it. They added that the new proposal will be subject to “numerous conditions including due diligence and arranging financing,” as well as “regulatory approvals and obtaining various third party approvals and consents.”
A $3.5 billion bid is not something to ignore, but it is to be expected that Tabcorp will take some time to come to a decision as that might work in their favour.
Fox Corporation has expressed an interest in the company’s Wagering & Media arm recently. The Murdochs see Tabcorp’s Wagering & Media division as the easiest way to get a foothold in the Australian betting scene. They will likely make a bid of their own if they are truly interested now that Entain has made yet another move. If that happens, a bidding war for Tabcorp Wagering & Media will likely ensue, and that’s probably what the Tabcorp management is hoping for right now.