SYDNEY (Reuters) - The Australian antitrust regulator said it has asked a court to review the approval granted for top horse race betting company Tabcorp Holdings Ltd to buy lottery owner Tatts Group Ltd TTS.AX for A$6.15 billion ($4.7 billion).
The move is a potential setback for a deal which was cleared last month, more than a decade after the companies first proposed it. Shares of both companies retreated from sharp initial gains after the news.
Tabcorp and Tatts took the unusual step of applying to the court-run Australian Competition Tribunal (ACT) after the usual arbiter, the Australian Competition and Consumer Commission (ACCC), raised concerns about the deal.
On Monday, the ACCC said it has applied to the Federal Court asking it to review the ACT’s decision to green-light the deal.
“We are seeking judicial review because we believe these legal principles are fundamental not only to the Tabcorp decision but to all future merger and nonmerger authorisation assessments,” ACCC Chairman Rod Sims said in a statement.
The ACCC said it was seeking a review based on the grounds that the ACT misused certain tests which competition regulators use to determine if a deal will hurt competition, and gave inappropriate weightings to data about the effects of the takeover.
Tabcorp said in a statement it was studying the application and would provide further information as appropriate. Spokespeople for Tatts and the ACT were not immediately available for comment.
The Federal Court will hear the matter in the coming months because the ACCC asked for an expedited hearing, a court spokesman said. When the ACT approved the deal, Tabcorp said it aimed to have the takeover completed in August.
After opening sharply higher, shares of Tabcorp and Tatts retreated after the ACCC’s statement to both be up about 1.6 percent by mid-session on Monday, while the broader market was up 0.6 percent.
Reporting by Byron Kaye and Jamie Freed; Editing by Muralikumar Anantharaman