UK-based Ladbrokes Coral in bid for betting giant Tabcorp: £2billion move to expand following merger
By Sarah Bridge for The Mail on Sunday
Britain's biggest bookmaker Ladbrokes Coral is planning an audacious multi-billion pound bid for Australia's largest betting company, Tabcorp.
The British betting giant is understood to have appointed advisers within the last few weeks to work on the proposal.
A successful deal will create one of the world's biggest gambling groups – worth close to £5billion.
Deal? Britain's biggest bookmaker Ladbrokes Coral is planning an audacious multi-billion pound bid for Australia's largest betting company, Tabcorp
The plan marks another major step in the expansion of Ladbrokes and comes hot on the heels of its £2.4billion merger with Gala Coral Group, which it finalised at the beginning of this month.
Tabcorp, which has a market value of £2.3billion, is one of the top 100 companies listed on the Australian stock exchange.
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It runs TAB sports and racing gambling in its own betting shops and at racecourses and pubs across the country.
It also operates the lottery-style Keno game which is played every three minutes in 4,200 pubs and clubs across Victoria, Queensland and New South Wales.
Just last month, Tabcorp announced it was planning to merge with rival Tatts Group in a major deal that would create an AU$11.3billion (£6.7billion) company with revenues of AU$5 billion.
However, sources close to the process told The Mail on Sunday that Ladbrokes Coral is not interested in Tatts and that it is planning to crash the deal with its offer for Tabcorp.
The bid is likely to be made up of a mixture of cash and shares. Tabcorp had a market value of £2.3billion when markets closed on Friday.
Ladbrokes is understood to have first approached Tabcorp in 2013 with a view to creating a joint venture between the two companies, but that was swiftly rejected by Tabcorp's chief executive, David Attenborough.
However, both companies are under increasing pressure in an industry which is seeing consolidation fever in the face of tighter regulation, higher taxes and increasing costs.
Like other British bookmakers, Ladbrokes Coral is vulnerable to a clampdown on the
controversial fixed odds betting machines known as FOBTs, with experts saying that if the maximum stake was cut from £100 to £10, then as many as half of all betting shops could close.
Irish bookmaker Paddy Power merged with online gaming operator Betfair in February, while Sportingbet owner GVC beat rival 888.com to acquire Bwin.party earlier this year.
William Hill, whose merger talks with PokerStars owner Amaya collapsed last month, successfully fought off a bid from Rank and 888. Industry insiders say Rank is likely to try again in the New Year.
Australians spend more on betting per capita than any other nation in the world. There are about 200,000 poker machines – known as pokies – in the country. The Australian government has banned online casino gambling, but its citizens still manage to lose an average of about $1,130 every year.
The Australian government has plans to clamp down on overseas operators.
Ladbrokes Coral declined to comment.
Ladbrokes Coral in bid for betting giant Tabcorp