Shareholders in gambling giant Tatts will vote on a proposed $11 billion merger in a fortnight, despite the risk of the deal facing a further legal challenge.
Tatts Group on Tuesday received orders in the Supreme Court of Victoria to run a vote on the tie-up with Tabcorp on December 12, but told the stock market that the consumer watchdog and a rival online bookmaker, CrownBet, retained the right to an appeal until December 20.
“There remains a risk that a further judicial review application or appeal of the tribunal’s decision is made,” the Tatts supplementary scheme booklet said.
“Although Tatts and Tabcorp consider that there is a low risk of any judicial review application or appeal leading to a materially adverse outcome for the combined group, Tatts shareholders should read this section … carefully and seek independent professional advice if you are in any doubt as to its implications.”
Tatts and Tabcorp, ‘s two biggest gambling companies, have faced legal setbacks and delays since announcing their mega-merger proposal late last year.
The deal was recently sent back to the competition tribunal for a second time, after the initial approval was appealed by the n Competition and Consumer Commission (ACCC) and quashed on the grounds that the tribunal had made errors in assessing the negative impacts of creating the merged gaming behemoth.
But the tribunal again gave the green light to the proposal, dismissing concerns about the potential lessening of competition as “immaterial”, and finding that the tie-up could even increase competition in the online wagering industry.
CrownBet and the ACCC did not comment on whether they had reached a decision to seek another judicial review of the decision. An appeal could cause any deal to be delayed until next year.
The scheme booklet said Tatts directors “unanimously recommend” that shareholders voted in favour of the merger, which could deliver savings of up to $130 million a year.
Also on Tuesday, Tatts Group reported its net profit had rocketed off the back of a series of large lottery jackpots.
The company’s net profit from continuing operations in the September quarter surged nearly 15 per cent to $67.2 million, compared with the same period last year, Tatts said.
The strong performance was largely thanks to a string of eight jackpots of $15 million or more, which lifted lotteries revenue by 8.8 per cent in the quarter compared to the same period last year.
Digital lotteries represented more than 16 per cent of Tatts lotteries sales, increasing by nearly 30 per cent, Tatts said.