Tabcorp says splitting its operations in two recognises the different opportunities and investment profiles of its businesses.
Bloomberg reports that Tabcorp Holdings Ltd., Australia’s biggest gambling company, plans to spin off its casinos into a separate company from its betting shops as it raises A$430 million ($425 million) in an entitlement offer.
Tabcorp proposed the breakup as it seeks to renew a betting-shop monopoly in Victoria state and boost spending on venues to lure high-stakes gamblers. Both businesses may need capital to pay for expansion as the company plans a revamp of casinos in Queensland State, in addition to the existing refurbishment of Star City in Sydney.
“Separate companies will enable the businesses to pursue different growth strategies”, Chairman John Story said. It is anticipated that Chief Executive Officer Elmer Funke Kupper, who has been in the role since July 2007, will oversee the separation before stepping down and taking a non-executive position on the board of the slot-machine and betting business, which will keep the Tabcorp name.