Gambling entertainment group Tabcorp Holdings Limited has announced that it has entered into an agreement to sell its 11.6% stake in lottery company Jumbo Interactive via a subsidiary.
As a result, Tabcorp has agreed to sell a total of 7,234,178 shares, valued at roughly AUD$98m, with the settlement of the sale expected to occur on September 24, 2020.
Stockbroker UBS will be responsible for seeking a buyer for the stake after agreeing a Block Trade Agreement with the gambling firm.
Tabcorp’s Managing Director and CEO, David Attenborough commented: “Following the recent extension of our long-standing commercial distribution relationship with Jumbo for a ten year term to August 2030, there is no longer a strategic rationale for Tabcorp’s shareholding in Jumbo.
“As a result, we have decided to monetise this investment, with the resulting capital to be used to further strengthen the balance sheet and support the move towards our recently revised target gearing range.”
After tax, Tabcorp has estimated that the deal will be worth around AUS$69m with the funds being used to pay down existing drawn bank debt facilities. Additionally according to the firm, the profit gained from the sale is expected to strengthen the company’s H12021 result.
The news of Tabcorp’s sale of Jumbo concluded a busy day for the company with the appointment of Janette Kendall as its non-executive director to the Tabcorp board also being announced.
Prior to taking up her new role, Kendall had previously served in a variety of senior management positions such as being the executive general manager of marketing at Crown Resorts, senior vice president of marketing at Galaxy Entertainment Group in China and general manager and divisional manager roles at Pacific Brands.
Tabcorp Chairman Paula Dwyer stated: “We welcome Janette Kendall to the Tabcorp Board. Ms Kendall is a highly experienced director who brings deep experience in the gambling entertainment industry, digital innovation, and marketing. We look forward to her contribution and complementing the existing skills and experience on the Tabcorp Board.”