Published: 23 April 2004
TABCORP Holdings Limited (TABCORP) today announced that it had entered into an agreement with UNiTAB Limited (UNiTAB) to sell the gaming machine monitoring business and the gaming machine jackpots business owned by Tab Limited (Tab) as well as its Queensland gaming machine monitoring business in the event that TABCORP acquires more than 50% of the shares in Tab.
TABCORP and UNiTAB have also agreed to extend the term of the current agreements between Sky Channel and UNiTAB under which Sky Channel supplies the racing picture to UNiTAB’s TAB agencies if TABCORP acquires more than 50% of the shares in Tab. These arrangements will now expire no earlier than 2013.
TABCORP has also agreed to extend the term of the current arrangements with UNiTAB in respect of the provision of fixed odds book management services which TABCORP currently provides to UNiTAB.
UNiTAB has also announced today that it intends to allow its current takeover offer for Tab to close at 7pm today.
TABCORP has also today amended the arrangements with NSW Racing, as separately announced.
Details of the sale of the gaming businesses
TABCORP has agreed to sell Tab’s gaming businesses to UNiTAB for $175 million and has agreed to sell TABCORP’s Queensland gaming machine monitoring business to UNiTAB for $40 million, subject to TABCORP acquiring at least 50% of Tab’s shares and subject to the parties receiving any necessary regulatory and shareholder approvals. Proceeds from the sale will be used to reduce debt.
Under the Heads of Agreement entered into between TABCORP and NSW Racing on 23 February 2004, and an amended Heads of Agreement entered into today, NSW Racing has approved the sale and agreed to forego its existing interest in the future earnings of Tab’s gaming business in this context.
The NSW government had previously announced that TABCORP would be required to divest Tab’s gaming business in the event that TABCORP acquired Tab.
Mr Matthew Slatter, TABCORP’s Managing Director and Chief Executive Officer, said “I am delighted that we have reached an agreement with UNiTAB in relation to the sale of the gaming machine monitoring and jackpots businesses. The sale will satisfy a requirement of the NSW government and provides certainty of value in relation to the sale of these assets. The sale allows us to focus on completing the acquisition of Tab and commencing the integration of Tab and TABCORP.”
Details of the Sky agreements
TABCORP has agreed to extend the term of the current arrangements between Sky Channel and UNiTAB under which Sky Channel supplies the racing picture to UNiTAB’s TAB agencies if TABCORP acquires more than 50% of Tab.
Mr Slatter said, “These new arrangements with UNiTAB will reinforce the value of Sky Channel in the event that TABCORP acquires Tab. Our agreement with UNiTAB will secure UNiTAB’s TAB agencies as a long term customer of Sky Channel. These arrangements are consistent with TABCORP’s strategy of working cooperatively with its key stakeholders (including Sky Channel’s customers and the racing industries) to maximise the value of Sky Channel.”
Mr Slatter continued, “TABCORP will retain the current level of Sky Channel coverage of races from Queensland, South Australia and the Northern Territory. This is great news for those racing industries and reflects TABCORP’s commitment to maintaining and further developing a vibrant Australian racing industry.”
Further details will be provided in a supplementary bidder’s statement which will be prepared by TABCORP and sent to Tab shareholders.
For the full report, please download the PDF file.