The Tabcorp Holdings Limited (ASX: TAH) share price is on the move on Thursday morning.
At the time of writing, the gambling company's shares are up almost 3% to $5.36.
Why is the Tabcorp share price rising?
Investors have been bidding the Tabcorp share price higher today after responding positively to the company's demerger update.
According to the release, the company has registered its demerger booklet relating to its Lottery business with the Australian Securities and Investments Commission.
This booklet is then expected to be despatched to shareholders next month ahead of a shareholder vote on the demerger in May.
What's happening?
The demerger, which Tabcorp's directors are unanimously recommending shareholders vote in favour of, will see the company's Lottery business spun off and listed separately on the Australian share market.
The Tabcorp board has determined that the demerger is the most certain and timely path, with lower regulatory impediments, to maximise value for shareholders.
The demerger will split the company into two: The Lottery Corporation (TLC) and New Tabcorp. The former will be home to its lottery brands including Keno, Tatts, and the Lott, which generated pro forma revenue of $3.2 billion and EBITDA of $611 million in FY 2021.
Whereas the latter will retain its wagering-focused businesses – Tab, Sky Racing, Max, and PGi. These businesses generated pro forma revenue of $2.5 billion and EBITDA of $464 million in FY 2021.
What about your shareholding?
If the demerger is approved and goes ahead, shareholders will receive one share in the TLC business for every share they own in Tabcorp on the record date of 25 May.
After which, the new shares are expected to begin trading on the ASX boards on a normal settlement basis on 2 June.
