(Reuters) - Ladbrokes owner Entain confirmed on Tuesday it had offered to buy Australian betting firm Tabcorp Holdings' struggling wagering and media business, as the UK gambling company looks to expand in the country.
Entain said any deal would be in line with its strategy of expanding across regulated international markets and follows its offer for Swedish sports betting firm Enlabs AB, as the company pushes ahead after snubbing a takeover bid from MGM Resorts.
Discussions were at an early stage for the non-binding indicative offer for the Tabcorp unit, the British firm said.
Earlier in the day, Tabcorp said it had received multiple proposals for a potential sale of the business, sending its shares close to a one-year high.
The business has come under pressure from intensifying competition as the industry faces a shift to online betting from traditional retail betting.
Local media reports https://www.afr.com/street-talk/ladbrokes-owner-entain-takes-punt-on-tabcorp-20210202-p56yti suggested that the unit could be valued at about A$2.8 billion ($2.13 billion), while the company's latest annual report showed it generated a revenue of A$2.08 billion in 2020.
Tabcorp has also been hit by coronavirus-induced closures of betting shops and cancellation of sporting events, forcing it to take measures to shore up its balance sheet such as the sale of an 11.6% stake in smaller peer Jumbo Interactive Ltd.
There is no certainty any transaction will occur, Tabcorp said in its statement, without naming the interested parties.
The Melbourne-based company said its board was assessing the proposals and would provide an update in due course.
The company's shares jumped as much as 11.7% to A$4.58, hitting their highest since February last year. They pared some gains to end 8.9% higher for the day.
Local media had first reported on the proposals and a plan involving the demerger of the wagering arm. (https://bit.ly/2MrcEKz)
($1 = 1.3142 Australian dollars)
(Reporting by Shruti Sonal and Tanishaa Nadkar in Bengaluru; Editing by Shounak Dasgupta and Sriraj Kalluvila)