Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Last Week in Event SPACE: Singapore Press, Tabcorp, Invesco Office, Justbon, IHH Healthcare, JD.com

After rejecting a A$3bn offer from Entain (ENT LN) (owner of Ladbrokes) to buy its wagering and media division, <a href="https://www.smartkarma.com/entities/tabcorp-holdings-ltd" target="_blank" data-smartkarma-citation="entities:6837:1" rel="noopener">Tabcorp Ltd (TAH AU)</a> said on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02358183-3A564328?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">29 March</a> it will undertake a strategic review to assess and evaluate all structural and ownership options to maximise value. The review includes a potential sale of the wagering &amp; media ops or a potential demerger - via the separation of the wagering segment or the lotteries business.
Tabcorp said it remained open to a bid for the wagering ops, but that $3bn was a long way from what was considered reasonable. Entain subsequently <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02367262-3A565915?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">bumped</a> its bid to A$3.5bn on the 27 April.
In <a href="https://skr.ma/hbhLR" target="_blank" rel="noopener">Tabcorp (TAH AU) - Conscious Uncoupling</a>, I mentioned Apollo Global Management was reportedly kicking tyres. Tabcorp has now <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02372290-3A566698?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> a non-binding proposal from Apollo of A$4bn for the wagering &amp; media and gaming businesses; or A$3.5bn for the wagering &amp; media ops. Tabcorp has yet to form a view on this proposal.
As always, more below the fold.

After rejecting a A$3bn offer from Entain (ENT LN) (owner of Ladbrokes) to buy its wagering and media division, Tabcorp Ltd (TAH AU) said on the 29 March it will undertake a strategic review to assess and evaluate all structural and ownership options to maximise value. The review includes a potential sale of the wagering &amp; media ops or a potential demerger - via the separation of the wagering segment or the lotteries business.
Tabcorp said it remained open to a bid for the wagering ops, but that $3bn was a long way from what was considered reasonable. Entain subsequently bumped its bid to A$3.5bn on the 27 April.
In Tabcorp (TAH AU) - Conscious Uncoupling, I mentioned Apollo Global Management was reportedly kicking tyres. Tabcorp has now announced a non-binding proposal from Apollo of A$4bn for the wagering &amp; media and gaming businesses; or A$3.5bn for the wagering &amp; media ops. Tabcorp has yet to form a view on this proposal.
As always, more below the fold.

<a href="https://www.smartkarma.com/entities/tabcorp-holdings-ltd" target="_blank" data-smartkarma-citation="entities:6837:1" rel="noopener">Tabcorp Ltd (TAH AU)</a> merged with <a href="https://www.smartkarma.com/entities/tatts-group-ltd" target="_blank" data-smartkarma-citation="entities:14615:1" rel="noopener">Tatts Group Ltd (TTS AU)</a> in November 2017 in an A$11bn transaction. Less than two years later, with the wagering division – which includes the retail betting shops and online betting brands – facing stiff competition on all fronts, and synergistic benefits from the merger not being extracted at expected levels, a demerger was floated.
Fast forward another three-plus years: after rejecting a A$3bn offer from <a href="https://www.smartkarma.com/entities/entain-plc" target="_blank" data-smartkarma-citation="entities:23926:1" rel="noopener">Entain (ENT LN)</a> (owner of Ladbrokes) to buy its wagering and media division, Tabcorp <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02358183-3A564328?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">said</a> last week it will undertake a strategic review to assess and evaluate all structural and ownership options to maximise value.
These include a potential sale of the wagering &amp; media ops or a potential demerger - via the separation of the wagering segment or the lotteries business.
The strategic review is expected to take between 12 weeks and 13 weeks, the conclusion of which may tie in with the release of the FY21 financials. 
Chairman Steven Gregg said he remains open to a full bid for the wagering ops, but:
<blockquote>
there’s a big gap between where we are and where that would need to be. The ball is really in their court. Source: AFR
</blockquote>
Apollo Global Management was also reportedly kicking tyres, along with bookie Matthew Tripp  - potentially backed the Murdochs.
As always, more below the fold.

Tabcorp Ltd (TAH AU) merged with Tatts Group Ltd (TTS AU) in November 2017 in an A$11bn transaction. Less than two years later, with the wagering division – which includes the retail betting shops and online betting brands – facing stiff competition on all fronts, and synergistic benefits from the merger not being extracted at expected levels, a demerger was floated.
Fast forward another three-plus years: after rejecting a A$3bn offer from Entain (ENT LN) (owner of Ladbrokes) to buy its wagering and media division, Tabcorp said last week it will undertake a strategic review to assess and evaluate all structural and ownership options to maximise value.
These include a potential sale of the wagering &amp; media ops or a potential demerger - via the separation of the wagering segment or the lotteries business.
The strategic review is expected to take between 12 weeks and 13 weeks, the conclusion of which may tie in with the release of the FY21 financials. 
Chairman Steven Gregg said he remains open to a full bid for the wagering ops, but:

there’s a big gap between where we are and where that would need to be. The ball is really in their court. Source: AFR

Apollo Global Management was also reportedly kicking tyres, along with bookie Matthew Tripp  - potentially backed the Murdochs.
As always, more below the fold.

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

La Francaise des Jeux / Equity Capital Markets

La Française des Jeux (FDJ) is the French national lottery established in 1933 and it is the largest company in the French gaming sector and has a monopoly in draw and instant lotteries (both point of sales and online) as well as point of sale sports betting in France. Based on gross gaming revenues, FDJ is second only to Italy’s Lottomatica in Europe, and also the 4th largest player in the world.Our previous insight on <a href="https://www.smartkarma.com/insights/fdj-french-national-lottery-ipo-odds-of-winning-are-better-than-their-lotteries" target="_blank" rel="noopener">FDJ (French National Lottery) IPO: Odds of Winning Are Better than Their Lotteries</a> focused on FDJ’s strong business model, stable earnings growth and its monopolistic position in the market. This time we shift our attention to the valuation of FDJ and in this insight, we’ll be looking at return on equity, dividend yield and other relative valuation multiples for both FDJ and its peers.

La Française des Jeux (FDJ) is the French national lottery established in 1933 and it is the largest company in the French gaming sector and has a monopoly in draw and instant lotteries (both point of sales and online) as well as point of sale sports betting in France. Based on gross gaming revenues, FDJ is second only to Italy’s Lottomatica in Europe, and also the 4th largest player in the world.Our previous insight on FDJ (French National Lottery) IPO: Odds of Winning Are Better than Their Lotteries focused on FDJ’s strong business model, stable earnings growth and its monopolistic position in the market. This time we shift our attention to the valuation of FDJ and in this insight, we’ll be looking at return on equity, dividend yield and other relative valuation multiples for both FDJ and its peers.

FDJ (French National Lottery) IPO Valuation: 32% ROE & 5% Dividend Yield Merits a Higher Valuation

La Française des Jeux (FDJ) is the French national lottery established in 1933 with the view of using the profits to support the following causes: reintegration of war veterans of the first world war into the society, supporting victims of agricultural disasters.FDJ is the largest company in the French gaming sector and has a monopoly in draw and instant lotteries (both point of sales and online) as well as point of sale sports betting in France. Based on gross gaming revenues, FDJ is second only to Italy’s Lottomatica in Europe, and also the 4th largest player in the world.The French government owns about 72% of the share capital of FDJ and through this IPO on the Euronext Paris, the government plans to reduce the ownership to 20% and in return expects to receive €1.6-2.0bn.The IPO got approval from the French Financial Markets Authority on 17th October 2019.Indicative Timetable Books Opened – 7th November 2019Books Closing    – 19th November 2019 (French Public and Employees) / 20th November 2019 (Global Placement)Price Setting      – 20th November 2019  Trading               – 21st November 2019As a part of a privatisation initiative, the French government plans to divest a maximum of 99.32m shares (52% of share capital) of FDJ through this IPO. The price range is set at €16.50-19.90 per share for the global placement and €16.17-19.50 per share for the French nationals. There is also an over-allotment option for 15% of the cumulative number of shares sold under the global placement and French public offering.The set price range implies a market capitalisation of €3.15bn-3.80bn, which would make FDJ one of the largest listed lottery companies in the world.

La Française des Jeux (FDJ) is the French national lottery established in 1933 with the view of using the profits to support the following causes: reintegration of war veterans of the first world war into the society, supporting victims of agricultural disasters.FDJ is the largest company in the French gaming sector and has a monopoly in draw and instant lotteries (both point of sales and online) as well as point of sale sports betting in France. Based on gross gaming revenues, FDJ is second only to Italy’s Lottomatica in Europe, and also the 4th largest player in the world.The French government owns about 72% of the share capital of FDJ and through this IPO on the Euronext Paris, the government plans to reduce the ownership to 20% and in return expects to receive €1.6-2.0bn.The IPO got approval from the French Financial Markets Authority on 17th October 2019.Indicative Timetable Books Opened – 7th November 2019Books Closing    – 19th November 2019 (French Public and Employees) / 20th November 2019 (Global Placement)Price Setting      – 20th November 2019  Trading               – 21st November 2019As a part of a privatisation initiative, the French government plans to divest a maximum of 99.32m shares (52% of share capital) of FDJ through this IPO. The price range is set at €16.50-19.90 per share for the global placement and €16.17-19.50 per share for the French nationals. There is also an over-allotment option for 15% of the cumulative number of shares sold under the global placement and French public offering.The set price range implies a market capitalisation of €3.15bn-3.80bn, which would make FDJ one of the largest listed lottery companies in the world.

FDJ (French National Lottery) IPO: Odds of Winning Are Better than Their Lotteries

Australia

Tabcorp Holdings Limited operates as a holding company. The Company, through its subsidiaries, provides gambling, gaming, wagering, and entertainment services. Tabcorp Holdings serves customers in Australia and in the United Kingdom.

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Tabcorp Ltd (TAH AU)

Last Week in Event SPACE: Singapore Press, Tabcorp, Invesco Office, Justbon, IHH Healthcare, JD.com

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Tabcorp (TAH AU): Apollo Shows Its Hand

Entail bumped its Offer for the wagering & media businesses by ~17%, now been matched by Apollo. This competitive bidding situation appears to have...

David Blennerhassett

Tabcorp (TAH AU) - Conscious Uncoupling

The announcement of a strategic review just three months into Gregg's tenure as chairman, suggests a sale or demerger may have legs. I'd be picking...

David Blennerhassett

FDJ (French National Lottery) IPO Valuation: 32% ROE & 5% Dividend Yield Merits a Higher Valuation

La Française des Jeux (FDJ) is the French national lottery established in 1933 and it is the largest company in the French gaming sector and has a...

Oshadhi Kumarasiri

FDJ (French National Lottery) IPO: Odds of Winning Are Better than Their Lotteries

La Française des Jeux (FDJ) is the French national lottery established in 1933 with the view of using the profits to support the following causes:...

Oshadhi Kumarasiri

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