The BetMakers Technology Group Ltd (ASX: BET) share price opened 11.48% higher this morning to an intraday high of $1.165.
At the time of writing, shares in the betting technology company have pulled back to a gain of 5.26% or $1.10.
This follows an announcement out of Tabcorp Holdings Ltd (ASX: TAH), with intentions to demerge its lotteries and wagering businesses.
BetMakers released a subsequent response to the market outlining its plans moving forward.
What’s driving the BetMakers share price?
Back in late May, BetMakers submitted a proposal to acquire Tabcorp’s Wagering and Media business for an enterprise value of $4 billion.
Today, Tabcorp has decided to pursue a demerger of its lotteries and wagering business, instead of BetMakers’ acquisition proposal.
This move will see Tabcorp spin off its lotteries and wagering businesses into two standalone, ASX-listed companies with “distinct operating profiles, strategies and growth opportunities”.
With BetMakers’ acquisition plans coming to an end, this means the company has avoided the need to raise $4 billion to acquire Tabcorp assets.
The $4 billion would have otherwise come from $1 billion through debt financing and $3 billion worth of new BetMakers shares.
Pleasingly, BetMakers advised that it will continue discussions with Tabcorp regarding “commercial opportunities in international markets”.
In addition, BetMakers said that its “international growth plans have accelerated in recent weeks” underpinned by announcements including the progression of Fixed Odds betting in New Jersey and the completion of its Sportech acquisition.
What did management say?
In response to the announcement, BetMakers CEO Todd Buckingham said:
Having received clarity from Tabcorp regarding the planned direction for its Wagering and Media business, BetMakers will continue discussions with Tabcorp regarding international opportunities, and we believe these opportunities have the potential to be significant.
BetMakers remains firmly of the view that the Company’s opportunities in regulated wagering jurisdictions, and in particular Australia and the United States, are a clear priority and we will continue to explore all opportunities that can accelerate or capitalise on this foundation.
BetMakers share price snapshot
BetMakers’ ambitious offer to acquire Tabcorp assets took a significant toll on its share price, tumbling 34.5% to a low of $1.01 between 28 May and 7 June.
With the deal no longer progressing, the BetMakers share price is still down 30.6% from its record close of $1.60 on 27 May.