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Institutions Push Tabcorp Demerger

Thursday, 10th December 2009

Institutional shareholders in Australia’s major gambling company Tabcorp “have made a case to the board to split the company into gaming & wagering businesses, probably via a demerger,” reported business columnist Elizabeth Knight in The Sydney Morning Herald. She noted: “Word is that a demerger has been under consideration by the Tabcorp board, but pressure from institutional investors will increase the likelihood of a split. Meanwhile industry sources suggest overtures have been made to sell the wagering business to Tatts Group in Victoria for $1.6 billion. Tatts is unlikely to pay more than $1.1 billion.” Knight declared: “Tabcorp is under serious earnings pressure on several fronts & time is not on its side. Whether the wagering business is separated via a trade sale or a spin-off, the course appears to be set.”

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