Both major companies are expecting the complete merger for next year.
Australia.- Whilst Tabcorp and Tatts Group are waiting for the final approvals of the merger, the leading Australian operator has begun to possess 10 percent of Tatts stake. The merger is set to be finished by mid-2017, although the business agreement must be approved by the companies’ shareholders.
With the latest transaction, Tabcorp has made a strategic move to shore up the AUS$11 billion merger. “The transaction is intended to help facilitate the proposed combination of Tabcorp and Tatts and provide shareholders with improved financial outcomes,” revealed the gaming company in a statement.
Tabcorp has filled a document to the Australian Stock Exchange in order to enter into a cash-settled equity swap with Tatts. The agreement granted Tabcop 147 million shares in Tatts Group, which represents 10 percent of the distinguished gaming company. Furthermore, the equity swap enables Tabcorp to vote on any Tatts shares and investments.
The strategic move was set at an average reference price of AUS$4.34 per Tatts share. As the brokerage and investment group CLSA explained, the equity swap does not interfere with the previous merger agreements, such as the future capital structure, but “it will now be more difficult for the merger to be voted down and/or for a third party to build a stake. This looks like a pre-emptive move rather than in response to an imminent bid or proposal.”