The $4
billion “merger of equals” between Tattersall’s and Unitab once again
highlights how incompetent state Labor governments have been in dishing
out lucrative gaming licences and privatising key assets over the years.

Unitab
was originally floated by the Beattie Government as the Queensland TAB
in November 1999 at $2 a share, so yesterday’s close of $15.71 means
the original investors have enjoyed a capital gain of 785%, plus great
dividends.

Tabcorp might be on the slide at the moment but the
original investors who paid $2.25 to the Kennett government in 1994 are
still 666% in front at the current price of $15.

Similarly,
those who paid $2.35 to the Carr Government for shares in the NSW TAB
float almost tripled their money by the time Tabcorp completed its
takeover two years ago.

If the state governments had been smart, they would have pooled their
TAB operations before privatisation rather than leaving the bleeding
obvious to the privatised state-based monopolies.

The stupidest government of all was led by Joan Kirner in Victoria when
they gave Tattersall’s a free pokies licence in 1991 which is today
worth an estimated $2 billion. No wonder the market is concerned the
Bracks Government might try and claw back some value when this licence
expires in 2012.

One
interesting aspect of the Tattersall’s-Unitab merger is the final board
composition as each side can nominate four representatives, but they
have not yet been named.

The four original Tatt’s trustees quite
outrageously lodged a $100 million claim as part of last year’s float.
One of them, William Adams, resigned from the board ahead of last
year’s AGM and another, Peter Kerr, was unceremoniously voted off as
two beneficiaries, Mike Vertigan and Julien Playoust, easily won a
proxy battle for board seats.

That left chairman David Jones,
who also chairs that pillar of the Victorian establishment, the
Melbourne Cricket Club, in splendid isolation as the sole surviving
trustee still suing his own shareholders for $100 million.

Will
the merger facilitate the departure of Jones or will the four
independent directors introduced with the float – Harry Boon, Lyndsey
Cattermole, Brian Jamieson and James King – get the nod, also leaving
the two interlopers out in the cold? It would be interesting to know if
the support of chairman Jones for the merger has come at a price and
what compensation, if any, will be offered to the three directors who
get turfed.

Peter Fray

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