By Anushka Trivedi
(Reuters) -Entain has sweetened its offer to A$3.5 billion ($2.72 billion) for Tabcorp Holdings' wagering and media business, as the British sports betting firm seeks to gain a larger foothold in Australia's regulated betting market.
Tabcorp said Entain's bid is an improvement over several informal offers it received in March which valued the company's unit, struggling from closed betting shops and cancelled sporting events due to COVID-19 restrictions, at around A$3 billion.
Neither companies disclosed the previous bid.
According to a local Australian paper https://www.smh.com.au/business/companies/ladbrokes-owner-increases-bid-to-3-5b-for-tabcorp-s-wagering-business-20210427-p57mnv.html, Tabcorp's share in the country's wagering market is about 37%, while Entain holds 11% through two entities. Their combination would eclipse the current market leader Sportsbet, owned by Ireland-based Flutter.
However, any deal would require Australia's competition regulator and Foreign Investment Review Board's (FIRB) approval, Tabcorp said.
Tabcorp also said it was assessing Entain's offer, talks on which had started in February, but would continue with its strategic review of the unit.
Entain, seeking to capitalise on a surge in online betting amid lockdowns by buying companies in regulated markets, recently closed the acquisitions of European operators Bet.pt and Enlabs AB.
Analysts at brokerage Peel Hunt said competing bidders for Tabcorp's business looks likely, but if Entain were successful, it would represent a material pivot to leadership in a regulated and growing market.
"We would back this management team to execute the integration of the target business successfully."
($1 = 1.2825 Australian dollars)
(Reporting by Anushka Trivedi and Nikhil Kurian Nainan in Bengaluru; Additional reporting by Muvija M; Editing by Arun Koyyur, Shounak Dasgupta and Shinjini Ganguli)