SYDNEY (Reuters) - An Australian tribunal once again cleared horse-race betting giant Tabcorp Holdings Ltd’s (TAH.AX) proposed $4.7 billion takeover of lottery owner Tatts Group Ltd TTS.AX, dismissing concerns raised by the country’s default M&A regulator.
The ruling, which drove up shares of both Tabcorp and Tatts, paves the way for a deal that has been mired in uncertainty since the firms announced their plans 13 months ago, their third such attempt after having failed twice since 2006.
The ruling also vindicates the companies’ unusual decision to bypass the Australian Competition and Consumer Commission (ACCC) after it raised concerns about the deal, and go to the court-affiliated tribunal normally used for advanced disputes.
The Australian Competition Tribunal (ACT) had earlier cleared Tabcorp’s proposal to buy Tatts for A$6.15 billion ($4.66 billion), but the decision was then appealed by the ACCC - default M&A arbiter.
“The tribunal is satisfied that the proposed merger is likely to result in substantial public benefits,” its president, Federal Court judge John Middleton, wrote in his ruling.
Shares of Tabcorp rose as much as 5 percent and Tatts gained close to 3 percent when they came out of a trading halt after the ruling on Friday, outstripping the broader Australian market that was up about half a percent.
“Tatts welcomes the tribunal’s decision to grant authorization for a second time,” it said.
Tabcorp called the decision “a significant step” and said it would put the deal to a shareholder vote on Nov. 30.
The ACCC had sought a review saying it believed the ACT misused certain tests to determine if the deal would hurt competition, and that it had given inappropriate weightings to data about the effects of the takeover.
But the ACT ruling dismissed the concerns, saying they were “unlikely to either arise or are not otherwise material”.
The ACT added that Tabcorp must make good on a promise to sell a Queensland gaming business to avoid hurting competition.
The ACCC said it would consider the tribunal’s reasons for the decision when the tribunal publishes them on Nov. 22.
($1 = 1.3203 Australian dollars)
Additional reporting by Aaron Saldanha in Bengaluru; Editing by Himani Sarkar