The Lottery Corporation Trading on the Australian Securities Exchange After Demerging from Tabcorp

  • Tabcorp has split its lottery from its gaming and wagering businesses
  • The Lottery Corporation started trading on the ASX on Thursday under the TLC ticker
  • TLC’s shares were at AU$4.55 (US$6.33) at the close of Thursday’s trading
  • Despite multiple billion-dollar bids, Tabcorp eventually opted for the demerger
  • Tabcorp demerger has ushered in a corporate reshuffle across the board
Tabcorp "TAB" logo
Tabcorp has finally demerged with The Lottery Corporation, with the latter commencing trading on the ASX on Thursday. [Image:]

Demerger complete

Australian gambling giant Tabcorp has completed its demerger with The Lottery Corporation, enabling the spinoff to begin trading on the Australian Securities Exchange (ASX).

The Lottery Corporation was able to start trading on a normal settlement basis on the ASX Thursday

Tabcorp shareholders overwhelmingly approved the firm’s demerger into standalone lottery and wagering businesses three weeks ago. That, combined with no issues with the Supreme Court, meant that The Lottery Corporation was able to start trading on a normal settlement basis on the ASX Thursday under the ticker TLC.

According to an official news release from the Lottery Corporation, holding statements will be sent to its shareholders on Friday.

The demerger completes months of speculation since Tabcorp first shared its desire to spin off its lotteries and keno arm in July 2021. According to the ASX’s closing prices on Thursday, TLC’s shares were at AU$4.55 (US$6.33), 1.09% down on the previous day’s trading.

Time to go solo

When Tabcorp first determined its strategy to demerger, multiple unsolicited takeover bids for its wagering arm followed, with interest coming from Entain, Apollo Global, and Betmakers.

Nothing became of the bids, with Tabcorp’s mantra in March 2021 being the figures put forward did not square with the true value of the wagering division. Each bid was approximately in the region of AU$3bn (US$2.07bn).

Late bids of AU$3.5bn (US$2.42bn) and AU$4bn (US$2.76bn) from Entain and Apollo Global — which wanted the lottery arm plus the wagering, media and gaming division — cut no ice with Tabcorp, who eventually announced in July that it was binning all the offers, and going the demerger route instead.

In May, Tabcorp’s shareholders voted unanimously to back the demerger, which has finally taken place. In relation to the spinoffs, a number of changes to Tabcorp’s corporate board and senior executive also took place this week.

Reshuffling the pack

According to Inside Asian Gaming, David Attenborough has retired as Tabcorp’s managing director and CEO. Adam Rytenskild is slated to step into both positions from Tuesday. Tabcorp chairman and non-executive director Steve Gregg will switch both his roles over to The Lottery Corporation. Other Tabcorp executives joining Gregg’s exodus are Harry Boon and Anne Brennan.

demergered entity provides a rare mixture of defensiveness, growth, and yield

According to the Motley Fool last week, analysts at Morgan Stanley said the Lottery Corporation holds “monopoly positioning” across the regions in which it operates. Elaborating further, the broker said the now demerged entity provides a rare mixture of defensiveness, growth, and yield.

Now that it’s demerged and listed, The Lottery Corporation seems a potential target for a takeover. A study by investment group Perpetual stated that in 65% of cases, one of the two split companies ended up being acquired within three years of going their separate ways.

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