Rivals still have life
THE $ 11 billion merger of gaming giants Tabcorp and Tatts Group is back on track for now, after the Australian Competition Tribunal gave the deal a green light for a second time.
However, the merger parties may have to jump more legal hurdles should those who challenged the original ruling by the Australian Competition Tribunal decide to challenge the second announced yesterday.
The Tabcorp- Tatts merger was thrown into doubt in July after the ACT had to review its original approval because of objections from the Australian Competition and Consumer Commission and online wagering firm CrownBet.
Those objections resulted in a Federal Court order to revisit the decision. The ACT said yesterday it was satisfied that the proposed merger was likely to result in substantial public benefits and that detriments identified by CrownBet – which is majority- owned by James Packer’s Crown Resorts – and the ACCC are unlikely to arise or are immaterial.
“The tribunal is satisfied in all the circumstances that the proposed merger would result, or would likely to result, in such a benefit to the public that the acquisition should be allowed to occur,” ACT president Justice John Middleton said.
The ACT said its approval required Tabcorp to divest its Odyssey Gaming business in Queensland.
The ACCC had argued the ACT had made an error in failing to assign less weight to benefits that would be retained by Tabcorp, its shareholders and the racing industry, and not shared with consumers more broadly.
Tabcorp said yesterday the latest ACT decision represented a significant step forward and it aimed to complete the deal before the end of the 2017 calendar year.
Tatts Group also welcomed the authorisation, while the ACCC said it had sought the review of the ACT’s original decision to clarify the law.
“We achieved that objective, with the Full Court making it clear that the Tribunal was required to take into account all competitive detriment that is likely to result from the proposed merger,” ACCC chairman Rod Sims said in a statement.
Mr Sims said the ACCC would consider the reasons of the ACT’s decision when they are published by Justice Middleton next Wednesday.
A CrownBet spokesman said it would review the ACT’s latest decision and consider its options.
The deal only now needs approval from the Supreme Court of Victoria and from Tatts shareholders, who are scheduled to vote on the merger on November 30 – the same day as the company’s annual general meeting.
Tatts said it would advise shareholders if any change to the timing of the merger meeting was necessary once it reviewed the ACT’s reasons for the latest decision.