The bidding war for Tabcorp’s wagering business is heating up with the first domestic offer made by tech company BetMakers (ASX: BET) which is being advised by sportsbetting kingmaker Matt Tripp, with a bid valued at $4 billion.
Despite the bid being from a Company whose market cap sits around $1.3 billion, the Aussie homegrown wagering tech company is confident they can match the value offered by rival bidders.
The offer from BetMakers is the third one confirmed by Tabcorp following global wagering giant Entain’s $3.5 billion offer which was followed by an offer from asset management firm Apollo for $3.5 billion plus $500k for Tabcorp’s gaming services business.
Unlike the preceding offers however, the BetMakers offer would maintain domestic ownership of the business with the bid consisting of $1m in cash and $3m in BET shares.
Tripp is best known as the founder of SportsBet which he built up to be Australia’s top online sportsbetting site before selling the business to Paddy Power in 2010. He then went on to do a similar thing with BetEasy where he took over before selling his stake to TSG in 2016.
While non-compete clauses linked to the sales of his previous sportsbetting companies have limited his involvement in the sector over the past few years, Tripp re-entered the fray in February 2021 via a $25m investment in BetMakers to secure roughly 5% of the Company at $0.70 per share. In the three months since, BetMakers’ market cap has increased from $600k to $1.3b under his advisory services leading to this bid for Tabcorp’s wagering and media business. BET shares closed yesterday at $1.60.
“I have been very impressed with the world-class team BetMakers has put together and the enormous growth opportunities they have created globally, including in the rapidly emerging US wagering landscape, and the timing could not be better for this unique opportunity,” said Tripp.
“Aside from the value that this offer is anticipated to unlock for shareholders in both companies, this is an incredibly exciting opportunity for the Tabcorp Wagering and Media business to maximise its commercial potential on a global scale.”
The indicative proposal would see Tabcop shareholders take on 65% equity in BetMakers which unlike Tripp’s other ventures, is not actually a bookmaker. Instead, Betmakers develops tech for bookmakers to digitise their operations so that they can run their books online with access to the world’s best data feeds.
No dates have been set for a response to the non-binding indicative proposal from BetMakers which is likely to progress to further negotiation given there are now three strong bids for Tabcorp’s wagering and media business. The decision to call for bids comes amid a strategic review of the overall Tabcorp business where it’s wagering operations have been losing money amid the rise of online gambling and decline of foot traffic through their retail operations.
While they may be the smallest players at the table, the opportunity to maintain domestic sovereignty under Tripp’s guidance could be enough to get the BetMakers bid over the line.