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Tabcorp shareholders approve demerger of The Lottery Corp from Tabcorp

Following the General Meeting and Scheme Meeting of Tabcorp Holdings Limited (Tabcorp) held on Thursday, Tabcorp announced that Tabcorp shareholders overwhelmingly approved the demerger of The Lottery Corporation Limited (The Lottery Corporation) from Tabcorp (Demerger).

Tabcorp Chairman Steven Gregg said: “We are pleased to have received shareholder approval for the demerger of The Lottery Corporation from Tabcorp. This is an important milestone in repositioning the Group’s portfolio and setting up Tabcorp and The Lottery Corporation for future success.”

Tabcorp will now seek orders from the Supreme Court of New South Wales for approval of the scheme of arrangement (Scheme) to effect the Demerger, with the hearing scheduled for Friday, 20 May 2022. If the Scheme is approved by the Court, Tabcorp proposes to lodge a copy of the orders made by the Court with the Australian Securities and Investments Commission on Monday, 23 May 2022 and the Scheme will become effective on that date.

Subject to approval of the Scheme by the Court, The Lottery Corporation shares are expected to begin trading on ASX on a deferred settlement basis on Tuesday, 24 May 2022.

The time and date for determining entitlements to The Lottery Corporation shares (the Record Date) is 7:00pm (Sydney time) on Wednesday, 25 May 2022.

Steven Gregg, Chairman, Tabcorp Holdings Limited (Tabcorp) addressed the General Meeting and Scheme Meeting for the proposed demerger of The Lottery Corporation Limited by Tabcorp.

If the Demerger is approved it will create two separate ASX-listed companies, with significantly different industry dynamics, business characteristics, financial profiles, growth strategies and investment opportunities.

The Lottery Corporation will be Australia’s leading lottery and Keno operator and is currently one of the highest performing lottery operators globally. It will operate a portfolio of well-known lottery game brands including Powerball and Oz Lotto.

New Tabcorp will continue to be a leading multi-branded, wagering, media and gaming services operator. It will operate some of Australia’s best-known wagering and gaming brands – TAB, Sky Racing and MAX.

Both companies will operate omni-channel businesses, with highly visible retail networks and strong digital reach.

Demerger rationale

As you know, the Board conducted a strategic review over March to July in 2021. As part of this review, the Board considered a number of potential alternatives, including the sale of Tabcorp’s Wagering and Media and Gaming Services businesses following receipt of several unsolicited, non-binding and indicative acquisition proposals.

After carefully assessing the proposals in the context of the strategic review, the Board determined to pursue this demerger as it was considered to be the most certain and timely path to maximise value for Tabcorp shareholders, with lower regulatory impediments.

Grant Samuel, the Independent Expert appointed by Tabcorp, has also concluded that the Demerger is in the best interests of Tabcorp shareholders.

The Demerger represents the next phase in the Tabcorp journey.

The merger with Tatts Group in 2017 effectively combined six complementary businesses into three operating divisions.

The merger created synergies and enhanced the diversification of each of the three
businesses.

We are now proposing to demerge one of these three larger and more substantial divisions, the Lotteries and Keno business.

Investment highlights

As the Demerger Booklet highlighted, the proposed transaction is expected to have a range of strategic and operational benefits.

The Lottery Corporation and New Tabcorp will be two significant businesses with focused and experienced boards and executive teams.

Each business will be able to adopt a more tailored and focused operating profile and capital structure.

The Board anticipates that The Lottery Corporation will be well positioned to continue to generate attractive returns for shareholders, driven by its strong cash flow generation, demonstrated ability to drive growth through product innovation and active game portfolio management as well as future potential upside from further enhancing the customer experience and increasing digital penetration.

The Board anticipates that New Tabcorp will also be well positioned to deliver a compelling customer experience via its omni-channel model and through simplifying and streamlining its MAX gaming business. There is also potential upside from any future change in the Australian wagering and gaming industry.

Shareholders will be able to retain an interest in both businesses and benefit from any further growth opportunities.

Both businesses will be able to access new and different investor categories and shareholders will be better able to value each business on a standalone basis.
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