Merger approval for Tatts
Kogan taps into health insurance market
TATTS shareholders have voted overwhelmingly for an $11 billion merger with rival Tabcorp, but not before the Queensland gambling outfit copped a red welt over pay.
More than one in four votes – 28 per cent – was against the remuneration report for Brisbane-based Tatts, whose brands include Ubet wagering and Golden Casket lotteries.
Its top brass earned $9.4 million last year.
Speaking at Tatts’ annual general meeting, chairman Harry Boon said two voting advisers had recommended against the report and accused those outfits of getting facts wrong or failing to heed explanations.
CGI Glass Lewis had recommended against pay, detailing concerns about issues including remuneration disclosure.
A vote above 25 per cent results in a first strike – a second strike a year later can trigger a board ousting. But it was a moot point with Tabcorp becoming the new head company in the merger.
The ruffle came at a largely pleasant meeting. Investors voted 98.6 per cent of shares for the merger.
“I can see the economies of scale,” shareholder Cliff Weder told the Cairns Post. “You either get bigger or you bail out.”
The merger means Brisbane loses a head office. Tabcorp’s official base is Melbourne and its chief executive officer David Attenborough resides in Sydney. Tatts, which merged with Queensland’s Unitab in 2006, only relocated to Brisbane several years ago.
Tatts investors receive 0.8 of a Tabcorp stock plus 42.5¢ for each share. That equates to about $4.69 each – 1¢ higher than Tatts’ closing price of $4.68 yesterday.
The merger had been beset by setbacks including the Australian Competition and Consumer Commission raising concerns and investor Sandon Capital arguing the offer was too cheap.
Charlie Green of Hunter Green Institutional Broking told the meeting that Tatts had already richly rewarded shareholders during its long run and the latest share price indicated the board had made the right decision.
The merger also means redundancies – Tatts CEO Robbie Cooke loses his job three days before Christmas and Tabcorp is citing other cost efficiencies and improvements of almost $130 million.
Mr Cooke said he had enjoyed his five years, citing the creation of a charity lottery-related division as a highlight.
He had not locked in future work plans yet. “I like being active. A lot of people say you should take six months off. I would find that frustrating,” he said.
“I’ve got significant part of my wealth tied up in the company, so look I’m very interested in how it performs,” Mr Cooke said.
Tatts said profits from continuing operations were up 17.7 per cent, before significant items, and revenues 6.1 per cent for this year’s first five months. ONLINE retailer Kogan is forging into the health insurance market in an alliance with listed private health insurer Medibank.
Under a three-year deal, Medibank’s budget arm, AHM, will supply health insurance policies to be badged with the Kogan brand.
They will be offered in the first half of next year.
Since it was founded last decade by entrepreneur Ruslan Kogan, the Australian online retailer has spread its tentacles from household electronics to a suite of other sectors including telecommunications in an alliance with Vodafone.
It already offers other insurance products like vehicle, travel and home insurance, that are provided by other socalled white label suppliers.
Medibank chief customer officer David Koczkar said the AHM and Kogan brands complimented each other well.
“Kogan has been very good at creating a sharp, low-fuss online experience for valueconscious customers,” he said. A COPY of All the Young Dudes by British rock outfit Mott the Hoople sparked Martin Alison’s passion for record collecting.
Decades later, the Redlynch resident is now the owner of a Cairns CBD record store.
Mr Alison has bought the Oceana Walk shop – known for the past two years as Revival Records – off Ross and Rhonda Colley, who will return to Victoria for personal reasons.
The store will undergo a name change, with “LP Records” signage likely to be installed early in the new year.
Mr Alison was excited by his new business venture.
“This has been a hobby of mine for 50-odd years,” he said.
“I’m not getting any younger, and needed something to do. “The timing was just right.” A Cairns resident for the past decade, Mr Alison said he had about 1600 records at his home.
He said there was something special about vinyl that could not be matched through digital music.
“I still listen to records all the time – it feels like you own part of the artist,” he said.
“You’ve got the record cover, the art, and it even sounds better in my opinion.”
Back in March, ARIA announced that while national CD sales had decreased, vinyl sales jumped from $8.9 million in 2015 to $16 million last year.
Mr Alison said records were popular among locals and tourists.
The sale caps off an enjoyable two years for Mr and Mrs Colley, who first started Revival Records in Hobart before moving the business to Far North Queensland.
“We’ve met a lot of lovely people with the same passion for music,” he said.
“A lot of our relationships with customers will probably continue over Facebook.”
Mr Colley said they would help with the “handover” until the end of this week.
Kogan executive director David Shafer said his company had eight million active members on its sales platform.
“(This deal results) in a win, win, win for Medibank, Kogan’s shareholders and most importantly Kogan’s customers,” Mr Shafer said. Kogan will earn commissions on sales of all insurance policies under the joint venture.