A report published by newspaper The Australian on Friday revealed that private equity firms have expressed interest in launching a takeover bid for the Tabcorp business. Matthew Tripp, an experienced betting executive, has reportedly held discussions with two private equity firms. One of these firms is considering purchasing the entire Tabcorp business for AU$9.0bn (£4.98bn/US$6.54bn), while the other is contemplating a $3.0bn bid for Tabcorp’s TAB betting division.
This report caused a significant surge in Tabcorp’s share price, increasing by 16.4% from $3.53 at the opening to $4.11 at the close of trading on Friday. However, Tabcorp has denied these takeover rumors and stated that it has not received any proposals regarding the company or its businesses.
Despite the denial, Tabcorp’s share price experienced a drop and currently stands at $3.94 per share. Additionally, Tabcorp recently suffered a major outage in its TAB, keno, and gaming services. The incident, caused by a fire in a third-party managed data center in Sydney, resulted in extensive damage to Tabcorp’s servers and infrastructure. This led to technical and systems outages, as well as the temporary closure of TAB retail venues.
Tabcorp has reassured its customers that there is no evidence of cyber security issues or customer data breaches resulting from the outage. The incident is estimated to have had an impact of under $10m on Tabcorp’s earnings before interest, tax, depreciation, and amortization (EBITDA).
In response to the outage, Tabcorp has announced a comprehensive and urgent review of its operations. The company aims to restore the full gambling entertainment experience for its customers and partners. Tabcorp’s CEO, David Attenborough, expressed apologies for the disruption caused by the outage and emphasized the company’s commitment to resolving the situation.
Last month, Tabcorp reported a 5.7% decline in revenue for the first quarter of its financial year, mainly attributed to the effects of the Covid-19 pandemic. Despite this decline, Tabcorp noted an increase in jackpot game sales, with sales rising between 15% and 30% compared to pre-pandemic levels.
