INTECQ PURCHASE ADDS RISK TO TAB-TATTS MERGER

Written on the 3 November 2016 by James Perkins

INTECQ PURCHASE ADDS RISK TO TAB-TATTS MERGER

TABCORP has taken a gamble with its acquisition of gaming services provider Intecq (ASX: ITQ), as it will have implications for the company's proposed $11.3 billion merger with Tatts Group

In a statement today, the Australian Competition and Consumer Commission (ACCC) says it has no objection to the $115 million Inteq deal.

The well-publicised TAB-Tatts merger had no bearing on the decision, but ACCC chairman Rod Sims says it will affect the decision on the Tatts merger.

"Any competition concerns relating to a combination of the three businesses [Tabcorp, Intecq and Tatts] will be dealt with in the context of the Tabcorp-Tatts review," says Sims, adding that no submission on the merger has been received.

In regards to the Intecq purchase, there were concerns from venues that Tabcorp could use data from the Intecq systems to distort competition.

However, Sims says the highly regulated nature of the industry and the penalties for such an action, is a strong deterrent.

"Misuse of venue data in the manner contemplated could result in severe consequences for Tabcorp, including the potential cancellation of Tabcorp's licences to operate in both Victoria and New South Wales," says Sims.

"Given the heavily regulated nature of the industry these businesses are operating in, and the consequences for failing to comply with those regulations, the ACCC considers Tabcorp is unlikely to misuse Intecq's venue data to distort competition following the acquisition."

Tabcorp (ASX: TAH) expects the purchase of Intecq, which was formerly known as eBet Ltd, to complete by 31 December.

Intecq has two business divisions: eBET Gaming Systems and Odyssey Gaming. The company operations in Australia and the Asia-Pacific and has commercial agreements with more than 1,200 customers operating around 75,000 electronic gaming machines globally.

At midday today, Tabcorp is trading up 0.21 per cent at $4.735 per share, Intecq is down 0.14 per cent at $7.08, and Tatts is down 0.37 per cent at $3.995.
 

 
Author: James Perkins Connect via: Twitter LinkedIn

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