The Australian Competition Tribunal (ACT) said that it rejected anti-competitive concerns over the proposed $11bn Tabcorp merger with Tatts, arguing the deal will actually bring greater competition.
In revealing its reasons behind allowing the deal to go ahead, following an appeal of its original approval by CrownBet and the ACCC, the ACT said it believed the deal is likely to result in public benefits to both consumers and the racing industry.
The tribunal said it “rejects the contentions that there is likely to be an anti-competitive detriment,” adding “that the public benefits relied upon by Tabcorp have not been adequately verified”.
The tribunal dismissed the concerns raised by third parties as either unlikely yo arise or as not material. In particular, the tribunal found that the merger will not lead to any material lessening of competition in the consumer wagering market or any other market.
It went on to say: “There will likely be greater competition than without the merger, particularly in online wagering, something that would add to the public benefits identified by Tabcorp, which would accrue to the racing industry and to consumers.”
The ACT also said that the merger would mean “a benefit to the racing industry in the form of increased product fees and by way of the benefits to shareholders from cost savings”.
The tribunal also found that the benefits of the proposed merger would be substantial, because “of an increased amount of competition. Additionally, there would also be a benefit to the racing industry in the form of increased product fees and by way of the benefits to shareholders from cost savings.”
The Tatts Group’s shareholders will vote on whether to go ahead with the deal at its AGM, which it announced yesterday it would now postpone until mid-December.
In a statement Tatts said: “In these circumstances, the Board considers it appropriate that further information about the Proposed Transaction and the Tribunal’s decision be sent to Tatts shareholders in advance of the AGM and the Scheme Meeting for the Proposed Transaction, and that those meetings be postponed to ensure that Tatts shareholders have enough time to consider the supplementary information beforehand.
“Accordingly, the Board has today resolved to postpone the date of its Annual General Meeting (AGM) to 1.30pm (Brisbane time) on Tuesday, 12 December 2017.
“Tatts intends to apply to the Supreme Court of Victoria (Court) next week for approval to postpone the Scheme Meeting to 12 December 2017 and provide shareholders with additional information about the Proposed Transaction and the implications of the Tribunal’s decision prior to the Scheme Meeting. These will be matters for the Court’s discretion.
“Tatts will notify shareholders as soon as practicable of any changes to the date and time of the Scheme Meeting and continues to work towards implementing the Proposed Transaction prior to the end of the 2017 calendar year.”