Just last week in New Zealand the SkyCity Entertainment MD announced that further consolidation in the Australasian gaming industry was inevitable. No sooner were the words spoken than Tattersall’s, Australia’s largest lottery operator, agrees to buy UNiTAB for control of the country’s second largest sports betting chain. The merger will create a gaming, wagering and lotteries company operating in every state and territory in Australia.

The merger has been recommended by the Boards of Directors of both companies and the arrangement must now be voted on by UNiTAB shareholders who will be offered 4.33 Tattersall’s shares for each UNiTAB share owned. There is also a A$522 million cash alternative at a price of A$14 per share for shareholders who prefer to receive cash for a minimum 28% of their shares, or higher on a pro rata scale back so that total cash consideration does not exceed A$522 million.

Upon successful completion of the merger, an additional A$300 million is expected to be allocated to fund an on-market share buyback, resulting in up to A$822 million being returned to shareholders. UNiTAB Chairman George Chapman said, “ UNiTAB and Tattersall’s are an excellent fit. We have similar business models and strategies, complementary assets and skill bases, and we both have a successful track record of serving our respective customers with the highest level of integrity, products and services.”

According to David Jones, Chairman of Tattersall’s, “This is an historic occasion for our respective shareholders." He added, "The combination of Tattersall’s and UNiTAB will create a diversified company with significant financial resources and expertise in gaming, wagering and lotteries. Moreover, the merged company’s ability to capture future growth opportunities in Australia and abroad will be significantly enhanced.” Full details of the proposed merger will be provided to UNiTAB shareholders in May for a June vote. The scheme also requires the relevant approvals from the state legislative bodies. Subject to all necessary approvals the lotteries, gaming machine operations and corporate office will be based in Melbourne and the wagering and gaming technology located in Brisbane. The new Board of Directors will comprise four UNiTAB and four Tattersall’s directors, with a Chairman to be nominated by the current UNiTAB Board. The CEO of the merged company will be Duncan Fischer, currently CEO of Tattersall’s.

Apart from its operations in Australia, the new company will have approximately 400 gaming machines in 85 South African venues and an investment in the UK gaming company Talarius Plc, which owns and operates some 9.600 gaming machines in over 180 venues. The existing brands of both Tattersall’s and UNiTAB will be maintained. After the merger has been implemented the new Board of Directors will consider the name of the listed entity. It is not yet clear whether any rival bids for UNiTAB will be forthcoming.
(E-03.27.06)

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