Federal Court setback to Tatts-Tabcorp merger
By Vanessa Cavasinni, editor Australian Hotelier
The Full Court of the Federal Court has nixed the Australian Competition Tribunal’s decision to grant Tabcorp Holdings permission to acquire Tatts Group Limited.
The Full Federal Court has referred the decision back to the Tribunal for consideration.
The ACCC had applied for a Federal Court review of the tribunal’s decision on 10 July, after Tabcorp had withdrawn its application for informal clearance with the commission to lodge an application for authorisation with the Australian Competition Tribunal. Crownbet also filed a separate application for review.
Rod Sims, chairman of the ACCC was pleased with the decision.
“The ACCC’s application for review was based on three grounds. The first was the Tribunal’s reasoning that it could only find that the proposed acquisition was likely to result in a detriment to be considered in the net benefit test if it concluded that there would be a substantial lessening of competition.
“The second ground was that the Tribunal made an error when it failed to compare the likely future state of competition both with and without the proposed acquisition in order to assess competitive detriment.
“Finally, the ACCC argued that the Tribunal had made an error in failing to assign less weight to benefits which would be retained by Tabcorp, its shareholders and the racing industry, and not shared with consumers more broadly,” Sims concluded.
Tabcorp responded to the news in a short statement, indicating that it will review the decision.
“Tabcorp is in the process of reviewing the Federal Court’s reasons, although Tabcorp notes that the issues in contention are of limited scope.”
The Tribunal wants to review and settle the matter as soon as possible, and subsequently all parties will have to file written submissions to the Tribunal before 4pm on Monday 25 September 2017. A directions hearing will be held at 10:15am on Tuesday 26 September 2017.
If the review is settled in Tabcorp’s favour the company intends to stick to its original transaction timetable, with a Scheme Meeting to be held on Wednesday 18 October 2017.