(Recasts, adds more context)
SYDNEY Feb 16 Australian lottery operator Tatts
Group Ltd on Thursday posted a 16.5 percent decline in
half-year profit as revenue fell due to a lack of big lottery
jackpots and a tough competitive environment in wagering.
Tatts, which in October agreed to a takeover offer from
betting group Tabcorp Holdings Ltd now valued at A$5.7
billion ($4.39 billion), reported a net profit of A$122.8
million for the six months ended Dec. 31, down from A$147
million a year earlier.
The result was slightly lower than Citi's estimate of
half-year profit of A$125 million.
In December, Tatts issued a surprise profit warning for its
lotteries division at the same time it rejected a rival takeover
proposal from a consortium backed by KKR and Macquarie
Tatts shares have fallen by 7.25 percent since Jan. 1
because Tabcorp's offer is primarily scrip-based. Tabcorp's
shares have fallen by 10.14 percent over the same period amid
concerns about rising competition in betting from Crown Resorts'
"The unavoidable truth when involved in corporate activity
of this type is it does bring a large amount of distraction to
any business," Tatts Chief Executive Officer Robbie Cooke said
in a statement.
Tatts on Thursday reported a 4.6 percent fall in first half
turnover in its wagering division.
The merger with Tabcorp, which has yet to receive approval
from the competition regulator, would result in an estimated
A$130 million of annual cost savings from combining their
($1 = 1.2972 Australian dollars)
(Reporting by Jamie Freed; Editing by Chris Reese and Leslie