Since having its takeover bid rejected by Sydney, Australia-based Star Casino, Tabcorp Holdings has rebounded with a new offer, worth $30 million more than the original, that has reportedly been accepted.
Tabcorp originally offered A$1.49 cash for every eight Star City shares, significantly less than the A$1.65 price the company's preferred shares traded at when the deal was brought to the table in April. Star City's independent directors subsequently rejected the offer.
Australian newspapers are reporting that a new offer for A$1.97 has been approved by the Star City group, however, there are still some bumps in the road. The deal still has to pass probity checks with the New South Wales Casino Control Authority. Plus, Leighton Holdings, a construction group with a 5 percent equity stake, hasn't yet accepted the offer.
The 85 percent interest for which Tabcorp is bidding is currently controlled by Harrah's Entertainment, which says it wants to concentrate on the U.S. market.
Once the smoke clears, Star City will likely proceed with plans of operating an online casino. CEO Neil Gamble said at an annual meeting in April that the company is looking for a suitable partner for such a project.