Tabcorp's shareholders have voted overwhelmingly in favour of splitting Australian operator Tabcorp's wagering and casino businesses - leaving the demerged entities ripe for takeover.
Over 92 per cent of the company’s shareholders approved of the demerger, which will see Tabcorp’s casinos, which include Star City in Sydney, Jupiters on the Gold Coast and Treasury in Brisbane, re-branded under the Echo Entertainment Group. The move recognises that the two businesses are increasingly divergent and will enable both to pursue their own strategies more effectively.
However, Tabcorp’s casinos have long been a target for acquisition, with James Packer’s Crown among those said to be monitoring the situation closely.
According to the Australian, Tabcorp chairman John Story was asked at the shareholder meeting whether the demerger would make the company "more vulnerable" to a buy-out. This, he said, was a possibility but not the ultimate aim of the demerger.
"If there are people within the broader markets who believe that they can extract greater value from either of these entities than the existing management can, and they are prepared to pay an appropriate premium, then it is in the best interest of the shareholders that there should be a takeover," he said. "That is the inevitable characteristic of an active, vibrant stock market and that often is where wealth is generated for shareholders, but we haven’t planned it with that outcome in mind."
