Pacific Consortium withdraws Tatts offer

News on 29 Apr 2017

The Pacific Consortium led by US private equity firm KKR has withdrawn its offer to buy Australian betting giant Tatts following a rejection of the latest A$7.2 billion offer by Tatts directors.

Pacific has made two unsuccessful multi-billion dollar bids for Tatts, which was already in merger negotiations with rival Tabcorp.

In rejecting the offer, Tatts directors opined that it could not reasonably be expected to result in a superior proposal when compared to the proposed Tabcorp merger, and that accordingly the directors felt that the proposed Tabcorp merger is in the best interests of Tatts shareholders.

Kerry Scott, who chairs the Pacific Consortium, which is made up of Kohlberg Kravis Roberts, Macquarie Group, First State Superannuation Scheme and North Haven Infrastructure Partners said in an interview with the Australian Financial Review:

“This is certainly a very disappointing day for Tatts shareholders. Given the current approach of the Tatts board the Consortium does not intend to undertake further work on its proposal.”

Tatts rejected the consortium’s first cash and scrip offer in December, saying it was not superior to a tie-up with Tabcorp (see previous report).

The Tabcorp-Tatts merger has the potential to create a A$8.6 billion betting powerhouse in Australia focused on horse racing, lotteries and sports betting, and the Australian Competition and Consumer Commission is due to announce its final decision on the merger next week.

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