Monday, January 18, 2016 : AUSSIE BETTING GIANT REJECTED A LADBROKES OFFER TO PARTNER UP
2013 approach was spurned by Tabcorp chief executive.
The Age newspaper in Australia published an historically interesting industry consolidation article over the weekend, claiming that back in late 2013 an approach for a joint venture from Ladbrokes was rejected by Aussie betting giant Tabcorp.
The alliance could have created the most powerful bookmaker group in the country, capable of competing against the online incursion of major European gambling groups that had been quicker off the mark in the Australian market than Ladbrokes.
The Age report indicates that Tabcorp chief executive David Attenborough wasted little time in rejecting the Ladbrokes advances, given that Tabcorp was at that time well ahead in the online market.
The newspaper fast-forwards the situation to today, where Tabcorp's market share in the online sector has fallen 5 percent to around 25 percent according to Morgan Stanley figures, while Ladbrokes holds about 7.5 percent.
The failed attempt to create an alliance is indicative of the wave of consolidation sweeping the fast-growing online gambling industry, the Age piece explains, as companies combine to save costs and better compete against powerful rivals, exemplifying the trend with the billion pound Ladbrokes-Coral and Paddy Power-Betfair mergers.
"With Paddy Power, Ladbrokes, William Hill and Bet365 all making significant inroads in recent years in the Australian online market, Tabcorp and rival Tatts Group made their own merger play at the same time," The Age notes, adding that talks were abandoned last November on an alliance that could have resulted in a A$9 billion Australian gambling behemoth.
Investor hopes still remain that such an agreement can be salvaged, The Age reports, pointing out that Robin Cooke, CEO at Tatts, voiced his continued support for a merger as recently as last (December) month.