The Betmakers Technology Group Ltd (ASX: BET) share price certainly hasn't had a week to remember… more like a week its shareholders would probably like to forget. Last Thursday, this was a company at a new 52-week (and all-time) high of $1.65 a share. That's after having climbed a hefty 345% or so over the preceding 12 months.
But today, the Betmakers share price is down another 4.23% to $1.09 a share. Yep, in just under one week, this company has lost over 32% (or close to a third) of its market capitalisation. Ouch.
So what happened to this formerly high flying ASX share?
Image source: Getty Images
What has sparked the Betmakers share price sell-off?
Well, it appears investors are in something of a revolt against an announcement Betmakers made to the markets last week (you guessed it, on Friday). This announcement flagged Betmakers intention to acquire the wagering and media business of Tabcorp Holdings Limited (ASX: TAH) for a price of roughly $4 billion.
As we reported at the time, Tabcorp would receive $1 billion in cash and $3 billion in Betmakers shares under the proposed arrangement, which Betmakers will fund through debt financing and the issuance of new shares.
Here's some of what Betmakers' Matt Tripp said about the proposal:
I am excited by the potential opportunity to reinvigorate the Tabcorp Wagering and Media business. There is significant potential for the business to grow in partnership with Betmakers and I hope to get the opportunity to support the Australian racing industry which relies on the success and growth of TAB.
Well, it appears investors don't quite agree, judging by the rather brutal sell-off this announcement has sparked. Interestingly, the Tabcorp share price has done a whole lot of not much since the proposal was gazetted. This possibly indicates that the market views the proposed arrangement as somewhat one-sided. However, it is worth noting that Tabcorp has yet to offer an opinion on the offer. It did release a statement last week that acknowledged the proposal, but stated the following:
The Tabcorp Board has not yet formed a view on the merits of the proposal and will assess it in the context of the previously announced strategic review.
At the current share price, Betmakers has a market capitalisation of $881.4 million.
