Apollo bids for Tabcorp’s wagering and gaming businesses

| By Robert Fletcher
Private equity giant Apollo Global Management has submitted a revised proposal worth AU$4.00bn (£2.23bn/€2.57bn/US$3.10bn) to acquire Tabcorp’s wagering and media business and gaming services segment.
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It has also put forward an alternative proposal, to acquire only the wagering and media business only for $3.50bn. Both offers will now be assessed by the Australian operator’s board.

The proposal remains subject to a number of conditions including due diligence, financing, regulatory approval and consent from all relevant third parties.

In March, Tabcorp announced that it was to carry out a strategic review of its business, with the possibility of selling its wagering and media division.

The strategic review will look at the possibility of divesting the business to third party. It will also consider a potential de-merger of either the wagering and media segment, or the lotteries and keno division.

The review followed an announcement in February that it had received a number of “unsolicited approaches and proposals” to acquire its wagering and media arm, with Entain among those confirmed to have put forward an offer.

At the time, Tabcorp said that no firm bids had been made, nor was there any certainty that any transaction would take place.

When the review was announced, Tabcorp said the initial proposals put forward by interested parties valued the wagering and media arm at approximately $3.00bn, which its board said did not adequately value the segment.

Entain then put forward a revised AU$3.50bn bid for the wagering and media business, which it said was “compelling both in terms of the value it represents for Tabcorp shareholders in cash, and certainty of deliverability”.

Apollo has been increasingly active in the gambling sector in recent months, having first lodged a bid to acquire William Hill in September last year. Apollo eventually lost out to Caesars Entertainment and withdrew from the race in November

Also in November, Apollo brokered a deal to invest €500m in Sazka Group and KKCG, the investment body behind the pan-European lottery and gaming giant, and also agreed to acquire land-based operator Great Canadian Gaming Corporation for over CAD$3.3bn.

Just before the turn of the year, Apollo then struck a deal to purchase International Game Technology’s Italian B2C gaming machine, sports betting and online gaming businesses for €950m, via its Gamenet Group subsidiary.

Most notably, in March it acquired the subsidiaries that operate casino giant Las Vegas Sands’ US properties for US1.05bn in cash and $1.20bn in seller financing, through a loan credit and security agreement.

That transaction also saw real estate investment trust VICI Properties acquire Las Vegas Sands’ real estate in a $4.00bn deal, as the operator withdrew from the US market.

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