In morning trade one of the worst-performing shares has been lottery operator Tatts Group Limited (ASX: TTS) which sank lower by over 4% to $4.35.
That decline came after the company announced that its board had determined that the Pacific Consortium’s takeover proposal was not superior to the proposed merger with Tabcorp Holdings Limited (ASX: TAH).
The Pacific Consortium, led by Macquarie Group Ltd (ASX: MQG), had made an offer equating to between $4.40 and $5.00 per share.
This was based on a cash offer of $3.40 per share and one share in the wagering & gaming business (it would then relist) valued at between $1.00 and $1.60 per share.
The board stated that:
“The Indicative Proposal is predicated on a number of key assumptions (see below) that are either incorrect, inconsistent with Tatts’ current expectations or unknown, and Tatts is unable to assess what impact, if any, these factors might have on the terms and conditions of the Indicative Proposal.”
As a result the Tatts board has said that it is unable to grant the Pacific Consortium due diligence or otherwise engage in discussions regarding the proposal.
End of the matter? Never say never, but judging by the sell-off today the market doesn’t appear to expect a better offer from the consortium.
I agree with the board on this one – that as things stand the merger with Tabcorp will create greater value for shareholders. So I’m pleased to see the board take this stance.
But I wouldn’t necessarily rush into buy its shares now. At almost 24x forward earnings I think Tatts is a little on the expensive side and investors can find greater value elsewhere in the market.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
- ASX 200 drops 0.5%: Treasury Wine sinks, Zip flat after AGM update, Bega Cheese rises – November 30, 2020 12:07pm
- Why Afterpay, Bega Cheese, Humm, & Telix shares are storming higher – November 30, 2020 11:37am
- Why the Viva Leisure (ASX:VVA) share price is climbing higher today – November 30, 2020 11:05am