Why the BetMakers (ASX:BET) share price is up 5% at lunchtime

BetMakers won't be acquiring Tabcorp's wagering business. Here's the rundown.

| More on:
Diverse group of people enjoying a win

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The BetMakers Technology Group Ltd (ASX: BET) share price opened 11.48% higher this morning to an intraday high of $1.165.

At the time of writing, shares in the betting technology company have pulled back to a gain of 5.26% or $1.10.

This follows an announcement out of Tabcorp Holdings Ltd (ASX: TAH), with intentions to demerge its lotteries and wagering businesses.

BetMakers released a subsequent response to the market outlining its plans moving forward.

What's driving the BetMakers share price?

Back in late May, BetMakers submitted a proposal to acquire Tabcorp's Wagering and Media business for an enterprise value of $4 billion.

Today, Tabcorp has decided to pursue a demerger of its lotteries and wagering business, instead of BetMakers' acquisition proposal.

This move will see Tabcorp spin off its lotteries and wagering businesses into two standalone, ASX-listed companies with "distinct operating profiles, strategies and growth opportunities".

With BetMakers' acquisition plans coming to an end, this means the company has avoided the need to raise $4 billion to acquire Tabcorp assets.

The $4 billion would have otherwise come from $1 billion through debt financing and $3 billion worth of new BetMakers shares.

Pleasingly, BetMakers advised that it will continue discussions with Tabcorp regarding "commercial opportunities in international markets".

In addition, BetMakers said that its "international growth plans have accelerated in recent weeks" underpinned by announcements including the progression of Fixed Odds betting in New Jersey and the completion of its Sportech acquisition.

What did management say?

In response to the announcement, BetMakers CEO Todd Buckingham said:

Having received clarity from Tabcorp regarding the planned direction for its Wagering and Media business, BetMakers will continue discussions with Tabcorp regarding international opportunities, and we believe these opportunities have the potential to be significant.

BetMakers remains firmly of the view that the Company's opportunities in regulated wagering jurisdictions, and in particular Australia and the United States, are a clear priority and we will continue to explore all opportunities that can accelerate or capitalise on this foundation.

BetMakers share price snapshot

BetMakers' ambitious offer to acquire Tabcorp assets took a significant toll on its share price, tumbling 34.5% to a low of $1.01 between 28 May and 7 June.

With the deal no longer progressing, the BetMakers share price is still down 30.6% from its record close of $1.60 on 27 May.

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Betmakers Technology Group Ltd. The Motley Fool Australia has recommended Betmakers Technology Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

Ten smiling business people wave to the camera after receiving some winning company news.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors enjoyed a strong recovery day this Tuesday.

Read more »

A graphic showing a businessman running up a white upwards rising arrow symbolising the soaring Magellan share price today
Share Gainers

CBA shares hit another all-time high. Can they surpass $200 in 2025?

CBA shares have a tailwind pushing up their price that has nothing directly to do with the bank's business performance.

Read more »

a young woman raises her hands in joyful celebration as she sits at her computer in a home environment.
Share Gainers

Why Alliance Aviation, Cogstate, Collins Foods, and Findi shares are roaring higher today

These shares are having a good session on Tuesday. Let's find out why.

Read more »

Unsure man analysing data on laptop.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors had a rough start to the week this Monday.

Read more »

Crude oil barrels rocketing.
ETFs

Why did the BetaShares Crude Oil ETF just spike 4%?

This ETF is attracting buyers in today's seller's market.

Read more »

Woman with an amazed expression has her hands and arms out with a laptop in front of her.
Share Gainers

Why BWP, Metcash, Resolute Mining, and SHAPE shares are pushing higher today

These shares are starting the week on a positive note. But why?

Read more »

Workers at the port joyfully jump high in the air with shipping containers in the background.
Industrials Shares

$10,000 invested in Austal shares a year ago is now worth…

Austal is an Australian shipbuilding company founded in 1988 that builds ships for the US Navy.

Read more »

Unsure man analysing data on laptop.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a disappointing end to a disappointing week for investors this Friday.

Read more »