Tabcorp Holdings Limited has entered into an agreement with Stockbroker UBS to sell its 11.6% stake in lottery company Jumbo Interactive.
Tabcorp will sell 7,234,178 shares in Jumbo at a price of AU$13.52 (US$9.69) per share for gross proceeds of approximately AU$98m (US$70.24m). Profits after taxes are expected to reach AU$69m (US$49.46m).
“Following the recent extension of our long-standing commercial distribution relationship with Jumbo for a ten-year term to August 2030, there is no longer a strategic rationale for Tabcorp’s shareholding in Jumbo,” David Attenborough, MD and CEO of Tabcorp, said in a release to the Australian Securities Exchange.
She said the company had decided to monetise its participation in the online lottery operator and use the profits to boost financial results in the first half of 2021 and strengthen its balance sheet.
Proceeds will also support Tabcorp’s move towards a “recently revised target gearing range.”