Shares in Tabcorp jumped to an 11-month high of $4.58 yesterday on news it might sell its underperforming wagering business.
Tabcorp confirmed that multiple parties have shown interest in its wagering business.
In response to media reports, Tabcorp told the ASX that it has received “a number of unsolicited approaches and proposals” regarding its wagering and media business.”
Tabcorp said the proposals were confidential, indicative, non-binding and subject to numerous conditions including due diligence, financing and various regulatory approvals,” said Tabcorp.
Shares rose 11.7% to a near 12-month high of $4.58 on the news and were last up 8.8% to $4.46.
“There is no certainty that any transaction will occur. The Tabcorp board is assessing the proposals and Tabcorp will update the market in due course,” the company said in its statement to the ASX.
The news comes as some big shareholders have been pressuring Tabcorp to improve returns by splitting its businesses.
That pressure saw the departure of the company’s chairwoman Paula Dwyer at the end of last year.
Tabcorp’s traditional wagering business (racing, trotting, greyhounds and online) has been struggling against online competitors for at least five years.
COVID has made that problem even more financially painful and forced Tabcorp to raise $600 million last August to weather the pandemic.
Tabcorp acknowledged the financial impact of the weak returns and COVID by slashing the value of its wagering business by $1 billion in its fits 2019-20 accounts after the lockdowns forced the closure of pubs, clubs and betting outlets, the suspension or modification of sporting competitions or events, such as racing.
It pushed the group to a $870 million annual loss for the 2019-20, compared to a $361 million profit in 2018-19.
