Tabcorp Holdings recently announced dividing its lottery proceedings to form a new company. After a long sale discussion, the company realized one entity is not enough to hold both media and sports betting operations.
That is why the Australian company decided to divide its proceedings into two listed entities on the ASX. While the decision is made, Tabcorp is open to suggestions regarding media and wagering assets. But, in the end, they want to find a simplified separation process.
Tabcorp Holdings was rumored to be talking with Entain PLC (global betting company,) BetMakers Tech Group Limited, and Apollo Global Management regarding selling its media and wagering assets. However, how the discussions turned out is yet to be released to the public.
The entire separation process will fall under the supervision of Steven Gregg (Chairman) and the executive board. Similarly, David Attenborough will maintain his position as the Chief Executive and Managing Director till June 2022. After that, Steven Gregg will become the Managing Director of the lottery business, while Sur van der Merwe will act as the Chief Executive.
Additionally, Bruce Akhurst will be designated as the gaming and wagering unit Chair, while Adam Rytenskild will be the CEO. David Attenborough has already extended his retirement until Steven Gregg’s infrastructural review.
The company’s revenue amounted to around 5.22 billion AUD, convertible to 3.93 billion USD, in 2020. The earnings held 56% due to the lotteries proceedings, while the media, gaming, and wagering operations accounted for 44%. The wagering department mostly revolved around horse racing and sports betting.
As per Steven Gregg, the lottery business will prove to be a pivotal factor in Tabcorp’s future. It will offer esteemed qualities leveraging from a growing economy and low capital intensity. In addition, the business has a proven history of delivering resilient and robust cash flow generation.
Tabcorp also released a statement stating that the separation will help both businesses indulge in future customer acquisitions. It will also allow them to cater to a varied investor base.
Investors staking in the lottery business can reap benefits from the international wagering adoption and domestic regulatory reformation. It will be a win-win situation for both the firm and its clientele.
2021 has been a good year for Tabcorp Holdings Limited. The company’s share has already grown 33% to reach the value of 5.20 Australian dollars. At the pace the business is going, it will seamlessly capitalize on the upcoming sports betting surge.