Tabcorp Spoils The Tattersall’s-UNiTAB Party

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By Rudi Filapek-Vandyck

Tabcorp (TAH) has swiftly ended all speculation and formally announced a bid for all outstanding shares of UNiTAB (UTB) this morning.

Tabcorp said its offer implies a value of $14.25 per UNiTAB ordinary share assuming a Tabcorp share price of between $15.00 and $17.00.

As one would expect, the company believes its scale and diversification of business means its offer provides "a far more attractive alternative" than Tattersall’s (TTS) for UNiTAB shareholders.

The offer provides UNiTAB shareholders with the choice of two alternatives: share holders either opt for between 0.84 and 0.95 Tabcorp shares per UNiTAB share or they can receive $8.25 cash and between 0.35 and 0.40 Tabcorp shares per UNiTAB share.

In case you are a current shareholders of UNiTAB, the company has done all the maths already for you, stating that, based on the closing share price on 30 May 2006 of Tabcorp shares at $2.98, Tabcorp’s implied offer value of $14.25 represents a premium of $1.35 per UNiTAB share compared to the alternative Tattersall’s proposal (if shareholders opt for option number one) or a premium of $1.04 per UNiTAB share in case shareholders go for the cash alternative of the offer.

The company adds the earnings per share (EPS) pre non-recurring items uplift for UNiTAB shareholders under the Tabcorp offer is expected to be "significantly higher" than under the Tattersall’s proposal.

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