Tabcorp to demerge, spin off casino assets into separate division
The primary reason for the separation is to make the two separate divisions more attractive to takeover offers, according to The Australian newspaper.
“There is no doubt that each company has a focused business and a clear sense of direction with respect to that marketplace . . . one of the outcomes is that it would, I guess, facilitate corporate activity or consolidation,” John Story, Tabcorp chairman, reportedly said at the shareholder’s meeting. “If there are people within the broader markets who believe that they can extract greater value from either of these entities than the existing management can, and they are prepared to pay an appropriate premium, then it is in the best interest of shareholders that there should be a takeover.”
The demerger measure received the support of 92 percent of Tabcorp shareholders. The new casino entity will be called Echo Entertainment and will operate Star City Casino in New South Wales, Jupiters Hotel & Casino on the Gold Coast, Treasury Casino & Hotel in Brisbane and Jupiters Townsville Casino.