Tatts Group Limited (ASX:TTS), operator of lotteries, wagering and monitoring businesses in Australia, saw its stock up 7.125% in today’s trading at the Australian Securities Exchange.
TTS ended the day as the top gainer on the ASX floor. Here are the top three facts on why Tatts Group Ltd’s Stock gained 7% today:
1. Tabcorp enters into an equit swap over c.147 million shares in Tatts.
In a disclosure to the Australian Stock Exchange (ASX), Tabcorp said it has entered into a cash-settled equity swap with an investment bank in respect of c.147 million shares in Tatts, representing c.10% of Tatts shares on issue.
The announcement today followed the announcement on 19 October 2016 of the proposed combination of Tabcorp Holdings Limited and Tatts Group Limited.
2. The deal will help facilitate the proposed combination of Tabcorp and Tatts.
Investors were upbeat after learning of the equity swap as the transaction will help pave the way for the planned combination of Tabcorp and Tatts and provide shareholders with the improved financial outcomes.
3. The combination of Tabcorp and Tatts will deliver significant value for both sets of shareholders.
The report of the equity swap sent Tatts’ stock gaining in today’s trading because, according to the disclosure, the combination of Tabcopr and Tatts is expected to deliver significant value for both sets of shareholders as well as material benefits to other stakehoders, including the racing industry, business partners, customers and governments.
Tabcorp and Tatts both expect the combination to be completed in mid-2017.
Here are some key information about the equity swap transaction:
The equity swap has an average reference price of $4.34 per Tatts share and provides Tabcorp with voting rights over any Tatts shres the investment bank holds in connection with the equity swap.
Tabcorp is entitled to receive payments equivalent to any cash dividents paid by Tatts in respect of c.147 million shares.
Tatts Group Limited (ASX:TTS)’s stock was up 7.125% in today’s trading to end the day at 4.210 a piece. – BusinessNewsAsia.com
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