Insights

BetMakers (ASX:BET) share price sinks on Tabcorp takeover proposal

The BetMakers Technology Group Ltd (ASX:BET) share price is sinking on Friday after announcing a takeover proposal for Tabcorp’s Wagering and Media business…
The post BetMakers (ASX:BET) share price sinks on Tabcorp takeover proposal appeared first on The Motley Fool Australia. –

The BetMakers Technology Group Ltd (ASX: BET) share price is sinking on Friday.

In morning trade, the betting technology company’s shares are down 9% to $1.45.

Why is the BetMakers share price sinking?

The BetMakers share price is sinking after the company confirmed speculation that it is interested in acquiring the Tabcorp Holdings Limited (ASX: TAH) Wagering and Media business.

According to the release, the company has submitted a non-binding, indicative proposal to acquire Tabcorp’s Wagering and Media business for an enterprise value of $4 billion.

Under the indicative proposal, Tabcorp would receive $1 billion in cash, which BetMakers plans to fund through debt financing, and $3 billion in BetMakers shares. In respect to the latter, the number of shares to be issued will be fixed at the time a transaction is agreed and priced at a 15% premium to the traded price of BetMakers prior to signing.

Based on the 10-day volume weighted average price (VWAP) to 26 May 2021, the indicative proposal would provide Tabcorp shareholders with an approximate 65% interest (on a fully diluted basis) in the combined BetMakers and Tabcorp Wagering and Media business plus A$1 billion in cash to Tabcorp.

Furthermore, BetMakers has proposed that the share consideration is distributed in specie to Tabcorp shareholders on a pro rata basis. This will allows Tabcorp shareholders to convert their indirect interest in Tabcorp Wagering and Media into a direct and liquid shareholding in the combined entity, providing flexibility and choice.

The Combined Entity is expected to be moderately geared at less than 2.5x net debt / EBITDA on a pro forma basis.

Acquisition rationale

There are a number of reasons that BetMakers believes the acquisition and proposal represents a compelling value proposition for both sets of shareholders.

One is that it brings together two highly complementary businesses to create a competitive global wagering and technology platform with scalable operations across both B2B and B2C markets.

Management also notes that the combined entity will be able to take advantage of BetMakers’ technology and product innovation to compete more aggressively in an increasingly digital-driven consumer market.

Another is that global opportunities will be pursued by leveraging the incumbent and iconic Australian TAB brand and content with BetMakers’ established global network, market access and strong partnerships with US racing bodies.

It also expects the monetisation of Tabcorp Wagering and Media’s media content on a global scale through BetMakers’ network of global partners.

BetMakers’ Strategic Adviser, Matt Tripp, said: “I am excited by the potential opportunity to reinvigorate the Tabcorp Wagering and Media business. There is significant potential for the business to grow in partnership with BetMakers and I hope to get the opportunity to support the Australian racing industry which relies on the success and growth of TAB.”

“I have been very impressed with the world-class team BetMakers has put together and the enormous growth opportunities they have created globally, including in the rapidly emerging US wagering landscape, and the timing could not be better for this unique opportunity. Aside from the value that this offer is anticipated to unlock for shareholders in both companies, this is an incredibly exciting opportunity for the Tabcorp Wagering and Media business to maximise its commercial potential on a global scale.”

Tabcorp response

Tabcorp has acknowledged the receipt of the proposal. However, its Board has not yet formed a view on the merits of the proposal. It intends to assess it in the context of the previously announced strategic review.

The Tabcorp share price is up 4% on the news. Judging by the market’s reaction, it appears as though investors believe Tabcorp shareholders are getting the better end of the deal here.

Learn where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of May 24th 2021

More reading

Here’s why the Betmakers (ASX:BET) share price just hit a 52-week high
Why Airtasker, Betmakers, Kogan, & Telix shares are charging higher

Fresh bets placed on Tabcorp (ASX:TAH) takeover speculation
Why the BetMakers (ASX:BET) share price lifted higher today
ASX winners and losers from the Victorian budget

The post BetMakers (ASX:BET) share price sinks on Tabcorp takeover proposal appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!