KKR in all-cash bid for Tatts Group

A group backed by private equity firm KKR has today (Wednesday) made a revised, all-cash offer of A$6.15 billion (US$4.65 billion) for Australia’s Tatts Group.

According to the Reuters news agency, the KKR-backed Pacific Consortium has put forward a bid of A$4.21 per share for Tatts, the largest lottery operator in the country.

Tatts is currently at the centre of a bidding war featuring the KKR consortium, as well as Tabcorp, which in October announced plans to merge with rival Tatts and create a combined business worth approximately A$11.3 billion.

However, the proposed merger is yet to secure the required approval from the Australian Competition Tribunal, and the Pacific Consortium could derail the move with its own offer.

Tabcorp’s cash-and-scrip bid stands at A$4.209 per share, but both offers are valued at less that the current price of Tatts share, which were trading at A$4.38 today.

The KKR-led Pacific Consortium, which also includes First State Superannuation Scheme, Macquarie Group and Morgan Stanley Infrastructure, failed in a bid for Tatts in December after the company turned down the offer.

Charlie Green, a director at Hunter Green Institutional Broking, which owns Tatts shares, spoke to Reuters about the latest offer: “It is all cash, so there is no capital gains tax roll-over relief.

“There are no synergies available for Tatts shareholders; the great advantage of the Tabcorp bid is that Tatts shareholders get to share in the upside.”

Related articles: Tatts rejects Macquarie bid in favour of Tabcorp merger
Tabcorp and Tatts Group plan A$11.3bn merger deal