Tabcorp Holdings, an Australian betting and lottery operator, has confirmed that several companies are interested in purchasing its betting division, with Entain plc – a United Kingdom betting giant among its suitors.

Tabcorp released a statement on Tuesday as they responded to local media reports that claimed the firm was sounded out on a possible purchase of its Wagering & Media division. This division controls an estimated 44 percent of the local racing and sports market.

In response, Tabcorp confirmed that they got “a number of unsolicited approaches and proposals in relation to a potential transaction.”

Also, Tabcorp disclosed that the proposals “were expressed to be confidential, indicative, non-binding and subject to numerous conditions.”

The board of Tabcorp is evaluating these proposals and will duly update the public when the time is right. They also added the standard caveat that there nothing was written in stone.

Subsequently, Entain released a statement that confirms the company made a non-binding indicative offer for the betting division of Tabcorp.

Already, Entain has a small presence through its Ned brands and Ladbrokes Australia and noted that by adding the betting unit of Tabcorp it would “would create a leading, integrated multi-channel and multi-brand wagering company.”

The shareholders of Tabcorp seem to like the news very much as it increased the company’s stock price to about 9 percent by Tuesday’s close. The shareholder’s reaction of Entain was more muted as we noticed the stock was unchanged from its opening price on Tuesday.

Last November, it is on record that Tabcorp denied media reports that it was a target of acquisition by several private equity-supported groups. This includes a group led by Matthew Tripp, the founder of Sportsbet/Beteasy.

Tabcorp’s Wagering & Media unit made revenue of AU$2.1 billion (-10 percent) and earnings of AU$371 million (-20 percent) in its latest fiscal year;

The fall in revenue was blamed on the difficulty of merging its TAB gambling brand with UBET brand owned by rival Tatts Group, which Tabcorp acquired in 2017.

These challenges were exacerbated by the shutdown of major sports events caused by the pandemic, although Australian racing was not unaffected by COVID-19.

As regards Entain, the company seems unable to stop going for the operations of its rivals, especially when they provide expansion opportunities geographically. However, Tabcorp’s betting unit’s valuation stands at AU$2.8 billion (£1.55 billion), which, together with the £252 million allocated for the pending acquisition of Enlabs, would double Entain’s current debt load.

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