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Apollo makes $3.1 billion bid for Tabcorp assets, offering maximum

Date published: May 6, 2021, 08: 28 hrs.

Last updated: May 6, 2021, 09: 56 h.

Todd Shriber

Apollo Global Management (NYSE: APO) is taking another step into Tabcorp's bookmaking and media business. It is offering nearly $3.1 billion for the Australian company's sought-after assets, while surpassing a recently revised $2.7 billion offer from Entain Plc (OTC: GMVHY).

Apollo Tabcorp
Ladbrokes signs off on Australian horse race. Owner Entain gets competition from Apollo in bidding for Tabcorp assets. (Photo: Racing Post )

There are conditions on the Apollo pitch, which is valued at $4 billion in Australian dollars, or $3. 09 billion based on current exchange rates. For that price, the private equity fund wants Tabcorp to include its gaming services unit along with media and sports betting. If the Australian bookmaker doesn't want to part with its gaming business, Apollo, at least for now, is simply matching Entain's offerings for media and sports betting.

Tabcorp's board has not yet formed an opinion on the merits of the revised proposal and will assess it in the context of the previously announced strategic review, "the company said in a statement issued shortly after the closure of the Australian markets.

In late March, after rejecting Entain's initial overture, Tabcorp promised a "strategic review "aimed at maximizing value for its businesses and investors. At the time, the operator said the review could result in the sale or spin-off of its bookmaking and media divisions, as well as the separation of its keno and lottery unit.

The gaming services business - the largest of its kind in Australia - is not included in the new strategic review. But Tabcorp placed the division under scrutiny last year due to poor performance.

Suitors line up for Tabcorp units

There is no shortage of interest in Tabcorp's bets and media arms. The company previously confirmed bids from multiple competitors. In addition to Apollo and Entain, Fox Corp. Rupert Murdoch's (NASDAQ: FOXA) is reportedly considering an offer. home market to rivals including Entain's Ladbrokes. If the U.K.-based company succeeds in acquiring assets from its Australian rival, the deal would create a giant in the Australian horse racing and sports betting market, as the combined would have a nearly 48 percent share.

So far, Entain has expressed no interest in the gaming services that Apollo wants, leading to speculation that the private equity fund may have the inside track on the bidding process due to its willingness to take the faltering company out of Tabcorp's hands.

It is not yet clear whether Fox would take a similar step or what price the media conglomerate is willing to offer Tabcorp affiliates.

"As already mentioned, the purpose of the strategic review is to evaluate and assess all structural and ownership options in order to maximize the value of Tabcorp's businesses for the benefit of shareholders ", according to a statement from the operator.

Apollo Maki ng Sports Betting Waves

Apollo is looking to flex its muscles in the global sports betting arena in a big way. In addition to its Tabcorp affiliate business, the private equity firm is seen as a major competitor to William Hill's European business. Caesars Entertainment (NASDAQ: CZR) will soon put the operation on the auction block.

Earlier this week, Apollo paid $5 billion to acquire media assets from Verizon (NYSE: VZ). This purchase includes Yahoo !, which means the buyer gets their hands on Yahoo ! Sports. This online entity has partnered with BetMGM, which is half owned by Entain. In fact, sports betting is seen as one of the main components of the acquisition, according to some market observers.

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