Australian gambling giant Tabcorp has rejected reports that it could be subject to a takeover bid, in a proposal involving private equity firms and fronted by betting pioneer Matthew Tripp.
A report published by newspaper The Australian on Friday said that a number private equity firms had approached Matthew Tripp with the aim of launching a takeover bid.
Matthew Tripp is reported to have held talks with two private equity firms, one of which is seeking to purchase the entire Tabcorp business for a fee of AU$9.0bn (£4.98bn/US$6.54bn).
He is a seasoned betting executive, having built up and sold first Sportsbet to what was then Paddy Power in 2009, then CrownBet, which combined with The Stars Group to acquire the William Hill business.
The enlarged entity, which was renamed BetEasy, was then acquired outright by the PokerStars operator outright late in 2019.
The other, unnamed, private equity firm is said to be considering a $3.0bn bid for Tabcorp’s TAB betting division.
The report saw Tabcorp’s share price rocket by 16.4% from $3.53 at opening on Friday to $4.11 at close.
However, Tabcorp has denied the report, distancing itself from any potential takeover for all or part of its business.
“Tabcorp is not aware of, and has not received, any proposal in respect of the company or its businesses,” Tabcorp said in a statement released today (9 November).
The statement led to a drop in Tabcorp’s share price to around the level it was trading before the market opened on Friday last week, and at the time of writing was priced at $3.94 per share.
Meanwhile, Tabcorp has announced that it will undertake a “comprehensive and urgent review” after a major outage hit its TAB, keno and gaming services over the weekend.
Tabcorp said the incident took place at around 11:30am AEDT on 7 November, but services have now largely been restored.
Based on a preliminary assessment, Tabcorp said a smoke and likely fire incident at a third-party managed data centre in Sydney resulted in extensive damage to Tabcorp’s servers and associated infrastructure.
This, Tabcorp said, led to technical and systems outages, as well as the closure of TAB retail venues.
Tabcorp added that there is no evidence of any potential cyber security issues or customer data breaches a this stage, and also said the incident had an estimated impact of under $10m on its earnings before interest, tax, depreciation and amortisation (EBITDA).
“The outage was unacceptable; Tabcorp remains deeply sorry for this and acknowledges the significant disruption caused to our customers, the racing industry and venue partners,” Tabcorp managing director and chief executive David Attenborough said.
“Our teams and technology partners are continuing to deploy all available resources into restoring the full Tabcorp gambling entertainment experience for our customers and partners.”
Last month, Tabcorp reported a 5.7% year-on-year decline in revenue for the first quarter of its financial year, primarily due to disruption caused by the novel coronavirus (Covid-19) pandemic.
Revenue from lotteries and keno fell 6.9%, despite strong jackpot sequences in the period. The operator also said jackpot sales were up between 15% and 30% in jackpot game sales, compared to pre-Covid-19 levels.
