Australia gaming giant Tabcorp has announced that, via a subsidiary, it is to offload its 11.6 per cent interest in online lottery organisation Jumbo Interactive.
In a media statement, the firm asserted that it no longer saw “a strategic rationale” for maintaining the shareholding following an extension of a long-term commercial distribution relationship with the firm.
Pursuant to an underwritten block trade agreement with UBS, Tabcorp has agreed to sell 7,234,178 shares in Jumbo at a price of AU$13.52 per share, for gross proceeds of AU$97.8m. Settlement of the sale is expected to occur today (September 24, 2020).
The Melbourne headquartered firm says that the proceeds will be used to pay down existing drawn bank debt facilities.
Tabcorp will record a profit after tax on the sale of approximately AU$69m which is expected to be reported as a significant item as part of the firm’s financial performance for the first half of next year.
David Attenborough, Tabcorp’s managing director and CEO, explained: “Following the recent extension of our long-standing commercial distribution relationship with Jumbo for a ten year term to August 2030, there is no longer a strategic rationale for Tabcorp’s shareholding in Jumbo.
“As a result, we have decided to monetise this investment, with the resulting capital to be used to further strengthen the balance sheet and support the move towards our recently revised target gearing range.”
Furthermore, Tabcorp has announced that Janette Kendall will join the group as a non-executive director, subject to the receipt of the required regulatory and ministerial approvals.
During her executive career, Kendall has served in various senior management roles including as senior vice president of marketing at Galaxy Entertainment Group in China and executive general manager of marketing at Crown Resorts.
Tabcorp chairperson Paula Dwyer noted: “We welcome Janette Kendall to the Tabcorp Board. Ms Kendall is a highly experienced director who brings deep experience in the gambling entertainment industry, digital innovation, and marketing. We look forward to her contribution and complementing the existing skills and experience on the Tabcorp Board.”