• Consortium pulls Tatts OZ offer—report

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    SYDNEY: A consortium led by US private equity firm KKR pulled its takeover bid for Australian gaming and lottery giant Tatts, reports said, after the firm rejected its revised multi-billion-dollar offer Friday.

    The Pacific Consortium has made two bids for Tatts, which is planning a merger with rival Tabcorp, but Tatts rejected the second all-cash bid of Aus$7.2 billion (Aus$5.4 billion) received last week, saying it was “not a superior proposal”.

    “(It) cannot reasonably be expected to result in a superior proposal when compared to the proposed Tabcorp merger,” Tatts said in a statement after assessing the offer, adding this meant it could not provide due diligence.

    “Accordingly Tatts’ board continues to believe that the proposed Tabcorp merger is in the best interests of Tatts shareholders and unanimously recommends the proposed Tabcorp merger in the absence of a superior proposal.”

    “This is certainly a very disappointing day for Tatts shareholders,” said Kerry Schott, chairwoman of Pacific Consortium — Kohlberg Kravis Roberts, Macquarie Group, First State Superannuation Scheme and North Haven Infrastructure Partners.

    “Given the current approach of the Tatts board the Consortium does not intend to undertake further work on its proposal,” she said, The Australian Financial Review reported.

    Tatts rejected the consortium’s first cash and scrip offer in December, saying it was not superior to a tie-up with Tabcorp, which the firms have pursued for years in a bid to cut costs and chase opportunities globally.

    Tatts and Tabcorp in October announced a merger to create an Aus$8.6 billion powerhouse taking bets on horse racing and sports events across Australia.

    The competition watchdog the Australian Competition and Consumer Commission is due to announce its final decision on the merger next week.

    Tatts shares closed 3.80 percent lower to Aus$4.30 on Friday trade in Sydney, while Tabcorp stocks slipped 0.63 percent to Aus$4.75.

    Tatts Group has a betting shop network in several Australian states and also operates a lotteries business. Tabcorp Holdings runs similar operations in two states with a broadcasting and media arm built around Sky Racing.

    Both companies also compete in online gambling.

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