MACQUARIE-CONSORTIUM SET TO LAUNCH BID FOR TATTS; SOURCES
Macquarie is set to launch bid for Tatts Group, sources told Street Talk on Wednesday, as part of a consortium of financial investors.
The bid is expected to be announced on Wednesday morning.
Sources said Macquarie, which has teamed up with a consortium of financial investors, lobbed the bid on Tuesday night.
The consortium includes private equity firm KKR, infrastructure manager Morgan Stanley Infrastructure and local superannuation investor First State Super.
There are no wagering or gaming operators in the consortium.
The bid would see Macquarie and its co-investors buy all of Tatts before handing the wagering unit back to Tatts shareholders, leaving Macquarie and co with the lotteries business.
It is understood they would pay $3.40 a share cash for Tatts' lotteries unit.
Macquarie is expected to take an equity stake as part of its role in the bidding group, in a structure expected to remind investors, bankers and analysts of Macquarie's principal-based dealing of a decade ago.
Sources said it was not the first time a Macquarie consortium has approached Tatts. It is understood there were talks in recent months, however they failed to agree a deal and Tatts signed the merger with Tabcorp.
Tatts' board and advisers are considering Macquarie's proposal.
In the meantime, it is expected to continue working on the Tabcorp deal, which was signed in October and expected to complete next year. Tabcorp's scrip-heavy deal valued Tatts at $4.34 a share at the time it was announced.
Goldman Sachs and Clayton Utz is advising Tatts, while Macquarie Capital is working with the Macquarie consortium.
Macquarie consortium's bid comes only weeks after Tabcorp secured a 10 per cent interest in Tatts via an equity swap and backed by a raid from investment bank UBS's equities desk.
It took the stake to protect against a counter bid for the $6.1 billion Tatts.
Tatts is one of the country's biggest gaming companies. It had $1.93 billion revenue and $494.8 million in earnings in the year to June 30, made from providing totaliser and fixed odds wagering and its lotteries business.
Source: Australian Finanicial Review