Why the Tabcorp (ASX:TAH) share price is in the spotlight

The Tabcorp Holdings Limited (ASX: TAH) share price will be in the spotlight when the ASX opens today. We take a closer look into why.

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The Tabcorp Holdings Limited (ASX: TAH) share price will be in the spotlight when the ASX opens today. This comes after the company announced it has received a revised bid for its wagering and media unit.

At yesterday’s market wrap, the gambling company’s shares finished the day at $4.80.

Details of the revised offer

Tabcorp shares could open up with a bang after the company revealed it has been given a takeover offer from Entain plc (LON: ENT).

Formerly GVC Holdings, Entain is one of the world’s largest sports betting and gambling companies. The group is listed on the London Stock Exchange and owns brands such as bwin, Ladbrokes, Coral, Sportingbet, and others.

According to its release, Tabcorp has received an unsolicited, non-binding and indicative proposal from Entain to acquire its wagering and media business.

The revised offer is valued at $3.5 billion and is subject to a number of conditions. These include due diligence, finance arrangements, receipt of all regulatory approvals (including ACCC and FIRB), and third-party consents.

Tabcorp management noted that it is yet to form a view on the latest acquisition offer. However, it will assess the proposed deal under the framework of its previously announced strategic review.

As such, the company will evaluate all structural ownership options to maximise the value from the divestment. This could involve either the potential sale to a third party or a potential demerger of its wagering and media business or lotteries and keno business.

Tabcorp share price summary

In the past 12 months, the Tabcorp share price has been on an upwards trajectory, gaining close to 70%. Year to date, the company’s shares gave gained above 20%.

It’s worth noting that Tabcorp shares are within a whisker of reaching their 52-week high of $5.06.

On valuation grounds, Tabcorp commands a market capitalisation of roughly $10.6 billion, with more than 2.2 billion shares outstanding.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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