Tabcorp has gone on market to pick up a 10% stake in Tatts.
The two companies last month announced a deal to create a diversified gambling entertainment group and ASX 50 company valued at $11.3 billion and with combined revenue of more than $5 billion.
The new entity will combine TAB betting, lotteries, Keno and gaming services and is expected to deliver at least $130 million of annual synergies and business improvements.
Tabcorp today announced a deal with an investment bank for 147 million shares in Tatts at an average price of $4.34. Tatts shares last traded at $3.93.
“The transaction is intended to help facilitate the proposed combination of Tabcorp and Tatts and provide shareholders with improved financial outcomes,” Tabcorp said.
The merger is expected to be completed in mid-2017.
In the latest full year results, Tabcrop post a net profit after tax of $169.7 million on revenue of $2.188 billion. Tatts had a full year profit of $263 million on revenue of $3.03 billion.