Tatts predator to allow dividends

Pacific Consortium will allow Tatts Group to continue to pay dividends if the consortium’s proposed acquisition of the lotteries and wagering firm can’t be completed the end of the 2017.

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The private equity group last week revised its takeover bid, offering $4.21 in cash for each Tatts share in the hope of boosting its chance of success against a proposal that would merge Tatts and wagering giant Tabcorp.

The Tatts board supports the merger proposal.

Under the consortium’s revised proposal, the consideration of $4.21 may include a special dividend of up to 25 cents per Tatts share.

Pacific’s proposal had assumed that, with the exception of any special dividend, Tatts would not pay any further dividends or capital returns prior to completion.

On Monday, the consortium said that should the transaction timetable extend beyond December 31, 2017, the consortium is willing to allow Tatts to continue to pay dividends to ensure the company’s shareholders are treated equitably.

“In this event, the future dividends would be received in addition to the $4.21 consideration received by Tatts shareholders,” the consortium said in a statement.

Pacific Consortium chair Dr Kerry Schott said confirmation that Tatts shareholders could continue to receive dividends showed that its revised proposal was superior to the Tabcorp proposition.

“In the interests of Tatts shareholders, the consortium believes the independent chairman and directors of Tatts should consider our proposal seriously and to allow access to due diligence,” Dr Schott said.

“We see no reason to not allow the prompt commencement of due diligence by the consortium.”

Tatts on Monday said, in a statement, it had not yet formed a view on how the consortium’s revised proposal compared to the Tabcorp merger proposal.

The Pacific Consortium comprises Macquarie Capital, Morgan Stanley Infrastructure, Kohlberg Kravis Roberts and First State Super.

Tatts shares closed three cents higher, or 0.68 per cent, at $4.45.