Macquarie Group said to offer up to A$7.3b for Tatts

[MELBOURNE] Macquarie Group Ltd and a group of investors offered as much as A$7.3 billion (S$7.8 billion) for Australian betting and lotteries business Tatts Group Ltd. in an attempt to scuttle a rival proposal from Tabcorp Holdings Ltd, according to a person familiar with the matter.

The group's proposal is worth as much as A$5 for each Tatts share, the person said, asking not to be named as the information is private. The offer comprises A$3.40 in cash and between A$1 and A$1.60 a share for the wagering unit that will be spun off, the person said. The Macquarie group will retain the lotteries business, the person said.

Details of the proposed deal were first reported by the Australian newspaper Wednesday, which also said Morgan Stanley, KKR & Co and First State were members of the consortium.

A spokesman for Tatts didn't return a call seeking comment. A Macquarie spokeswoman didn't immediately respond to a call and email requesting comment. Tabcorp in October agreed to buy Tatts in a deal valued at the time at A$4.34 a share to take on online rivals such as Bet365 Group Ltd. Based on yesterday's close, Tabcorp's proposal values Tatts at A$4.145 a share.

Tabcorp last month aimed to smooth its acquisition of Tatts by securing control of a 10 per cent stake in the Brisbane-based firm, potentially warding off approaches by overseas competitors. That transaction stoked speculation that Tatts was on the block for rival suitors.

Overseas companies such as Bet365, William Hill Plc and Ladbrokes Plc have made day-and-night online betting accessible to Australians, who lose more gambling per capita than any nation in the world.

Tatts offers wagering on horse racing and sports matches in Queensland, South Australia and Tasmania states and also operates a lotteries business. A merger of Tatts and Tabcorp would take bets on horse racing, greyhound racing and sports matches across Australia.

It would have wagering licenses stretching out to the end of this century in three states, including the most populous New South Wales. Still, a tie-up needs competition approval and the watchdog plans to announce a decision on Feb 23. Rod Sims, chairman of the Australian Competition and Consumer Commission, told the Age newspaper at the time of the deal that it would raise "major concerns" and "there's a lot of overlap" between the two companies.

BLOOMBERG