Australian gambling firm Tabcorp has seen its share price tumble by 80.2% following the confirmation of its demerger with The Lottery Corporation.
The demerger occurred on May 23 after the firm gained regulatory approval from the Supreme Court of New South Wales late last week. This saw Tabcorp shed its lottery and keno business to become two ASX-listed entities.
Tabcorp leadership noted that the scheme is to allow for both the lottery & keno and the gaming divisions to provide benefits to shareholders, creating two ‘focused executive leadership teams’.
However, Tabcorp’s share price fell to around AU$1 on May 24 as investors seemingly head toward The Lottery Corporation shares. Prior to the demerger, shares were priced around AU$5, representing an 80.24% slump in shares.
This is indicative of the loss of the lottery and keno division, though Tabcorp does still retain its sports wagering and gaming divisions.
As reported by Australian Financial Review, The Lottery Corporation floated as a $10bn valued company at its ASX debut, owing to the division’s past profitability.
Courtesy of the Australian outlet, The Lottery Corporation’s Managing Director, Sue van der Merwe, commented on its debut: “We feel it’s important we focus on the current business, and we don’t lose sight of the importance of that.
“Having said that, opportunities to grow outside that are something of interest to us. And something we need to unpack more with the board in the coming months.”
In its H1 financial report published in February, Tabcorp noted that its lottery division set a profit record for a half-year but that weak market conditions brought on by the pandemic saw EBITDA figures slump 5.5% year-on-year.