Tabcorp raises AU$230m from retail share sale

Australian lotteries and gaming giant Tabcorp has raised approximately AU$230m (£130.1m/€142.2m/$168.8m) from the sale of shares to retail investors, taking its total proceeds from an accelerated entitlement offer to $600m.

Having raised $371m from the sale of shares to institutional investors, Tabcorp retail investors then sold 8.5m retail entitlements between 24 August and 3 September, representing approximately 12% of entitlements, generating $2.7m for shareholders.

In total, 35,000 retail shareholders took up their entitlements, which saw them acquire one new share for every 11 existing ordinary shares. This saw investors subscribe for 31.4m new Tabcorp shares, raising approximately $102.0m before the offer period closed on 10 September.

A further 39.7m retail entitlements were then made available through a retail shortfall bookbuild, priced at $3.31 per retail entitlement.

Eligible shareholders that did not take up their entitlements, and ineligible retail investors, will receive $0.06 per entitlement sold through the bookbuild.

“The completion of the retail shortfall bookbuild concludes the renounceable entitlement offer announced with our FY20 results,” Tabcorp chair Paula Dwyer said.

“We are pleased that all of our retail shareholders who did not participate have realised value for their rights.”

Following the publication of Tabcorp’s results for the year ended 30 June the operator announced the fundraising drive, to improve its credit rating and conserve additional capital.

For that period, revenue declined 4.8% to $5.22bn and non-cash impairment charges saw the business swing to an $870m net loss.

It said that the ongoing uncertainty around the novel coronavirus (Covid-19) pandemic had prompted the business’ board to pay down debt and reduce its gross debt to EBITDA ratio to between 2.5 to 3.0x, down from its current rate of 3.0 to 3.5x.

Through the $600m entitlement offer, its gross debt to EBITDA ratio will be reduced from 3.8x to 3.2x.