Demerger of Echo Entertainment Group
The demerger of Echo Entertainment Group Limited (Echo) from Tabcorp Holdings Limited (Tabcorp) was implemented on 15 June 2011 by way of Scheme of Arrangement pursuant to the Tabcorp Scheme Booklet dated 15 April 2011 (Demerger).
Under the Demerger, Eligible Shareholders were entitled to receive one Echo Share for each Tabcorp Share they held at the Record Date of 10 June 2011.
The number of Tabcorp Shares held by Eligible Shareholders remains unchanged as a result of the Demerger.
The Demerger enables each Eligible Shareholder to have separate investments in two companies:
- Tabcorp: which will continue to operate Tabcorp's wagering, gaming and keno businesses; and
- Echo: which will operate Star City Casino in New South Wales, Jupiters Hotel & Casino on the Gold Coast, Treasury Casino & Hotel in Brisbane and Jupiters Townsville Casino.
Echo Shares commenced trading on the Australian Securities Exchange under the code EGP on 6 June 2011 on a deferred settlement basis.
Ineligible Overseas Shareholders received cash instead of Echo Shares. The Echo Shares to which Ineligible Overseas Shareholders would otherwise have been entitled, were sold on-market at an average price of $4.1951 per Echo Share. The proceeds from the sale of the Echo Shares were distributed to each Ineligible Overseas Shareholder on 30 June 2011. No brokerage, stamp duty, or other selling costs applied to the on-market sale of these Echo Shares.
Tax Issues
As part of the Demerger, Tabcorp sought a ruling from the Australian Taxation Office on the taxation implications for shareholders. On 29 June 2011, the Australian Taxation Office issued Class Ruling CR 2011/66, in accordance with the application made by Tabcorp. A copy of the Class Ruling CR 2011/66 can be downloaded below.
The Class Ruling states “For the purposes of the cost base and reduced cost base apportionment under subsections 125-80(2) and 125-80(3) of the ITAA 1997, the Commissioner accepts the volume weighted average price of the Echo Shares, $4.2711, and the Tabcorp Shares, $3.3067, as traded on the ASX (whether on a deferred or normal settlement basis) over the first five trading days after the Effective Date, 3 June 2011 as a reasonable approximation of the relative market value of those shares.”
A Tax Calculator is provided below as a general guide to assist shareholders in calculating the Australian capital gains tax cost base allocation for Tabcorp Shares and Echo Shares.
The above does not take into account the individual circumstances of particular Tabcorp shareholders and does not constitute tax advice. Tabcorp shareholders should seek advice from an appropriate professional adviser on the tax implications of the demerger based on their own individual circumstances.
Summary of key dates
| 15 April 2011 |
- Date of First Court Hearing at which the Court ordered the convening of the Scheme Meeting
|
| 1 June 2011 |
- Shareholders approved resolutions in connection with the Demerger at the Scheme Meeting and General Meeting
|
| 3 June 2011 |
- Demerger approved by the Supreme Court of Victoria
- Last day of trading in Tabcorp Shares cum-Demerger Entitlement
- Tabcorp Share price of $7.72 at close of trading on ASX
|
| 6 June 2011 |
- Echo listed on ASX and Echo Shares commence trading on a deferred settlement basis
- Tabcorp Shares commence trading on ASX on an ex-Demerger Entitlement basis
- VWAP for Echo Shares for first 5 days of trading on ASX (6-10 June) was $4.2711 per Echo Share
- VWAP for Tabcorp Shares for first 5 days of trading ex-Demerger Entitlements on ASX (6-10 June) was $3.3067 per Tabcorp Share
|
| 10 June 2011 |
- Scheme Record Date for determining entitlements
|
| 15 June 2011 |
- Demerger Date and transfer of Echo Shares to Eligible Shareholders
|
| 20 June 2011 |
- Dispatch of holding statements for Echo Shares to Eligible Shareholders
|
| 30 June 2011 |
- Dispatch of payments to Ineligible Overseas Shareholders
|
For further information about the Demerger, please refer to the below announcements made by Tabcorp.
Share Registry
Enquiries about Tabcorp Shareholdings go to:
Link Market Services Limited
Level 1
333 Collins Street
Melbourne Vic 3000
Australia
Telephone: 1300 665 661 (Australia only) (local call cost)
Telephone: +61 2 8280 7418
E-mail:
tabcorp@linkmarketservices.com.au
Website:
www.linkmarketservices.com.au
Enquiries about Echo Shareholdings go to:
Link Market Services Limited
Level 12
680 George Street
Sydney NSW 2000
Australia
Telephone: 1300 880 923 (Australia only) (local call cost)
Telephone: +61 2 8280 7504
E-mail:
registrars@linkmarketservices.com.au
Website:
www.linkmarketservices.com.au