The board of Unitab has this morning come out swinging
against Tabcorp’s $14.25 a share takeover offer on the grounds that,
unlike with its merger of equals with Tattersall’s, a hostile bid
against a competitor with big synergies should deliver a
decent premium for shareholders in the target.

Tabcorp CEO Matthew Slatter was openly stressing on Business Sunday and Inside Business
yesterday that this is definitely not a final offer, so the Unitab
board is obliged to go through the process of rejection until that
increased offer materialises.

Tattersall’s doesn’t have the financial firepower to match it with
Tabcorp and is also severely disadvantaged by the heavy scrip component
of its offer which will expose Unitab shareholder to the vagaries of
Victorian politics in an election year when the renewal of its $2
billion pokies licence is rapidly becoming a hot political issue.

Only yesterday Sunday Age columnist and former ABC broadcaster Terry Lane ripped into Victoria’s
excessive dependency on gaming revenue and today’s Herald Sun carries
a very strong column from Sally Morrell, a veteran journalist and Andrew
Bolt’s wife, which began as follows:

I know exactly what Victorian Opposition Leader Ted
Baillieu needs to do to lift himself from inevitable loser to a real
contender. Just promise to get rid of the pokies. Yes, it’s a big call.
But I don’t think our politicians realise quite how angry we are in the
‘burbs about these horrible, horrible machines.

Hmmm, if the next Victorian Parliament follows that advice
from the highest penetration newspaper in the world, Tattersall’s will
quickly be a $1 stock. Today it is down another 4c to $2.94 as it again
approaches a record low.

In a strange way the takeover battle for Unitab, coming at the same
time as the Bracks Government reviews duopoly pokies licences held by
Tatts and Tabcorp after 2012, is actually going to crank up the
political pressure
against pokies in Victoria because the value of the licences will be
widely debated and a whole lot more information is coming into the
public domain.

For instance, check out the 252-page explanatory memorandum
for the
Tattersalls-Unitab merger and you’ll find all sorts of useful
information for anyone planning to campaign against poker machines at
the Victorian election. I’ll certainly be using it come election time
as will Gabi Byrne, the most prominent reformed pokies addict in
Australia, who this morning has been confirmed as the candidate for start-up party People Power in the upper house region of Eastern Victoria.

People Power is holding a function on 15 June with a range of
interesting speakers such as Phil Cleary, Jack Reilly and Les Twentyman
– and they’ve even got South Australian No Pokies kingmaker Nick
Xenophon on the flyer, albeit in a “to be confirmed” capacity.

I’ve never before seen a situation quite like this where a
multi-billion dollar takeover battles intersects with a state election
campaign. As we saw with the Snowy, politicians can wilt under mounting
public pressure but if the Bracks government is going to bend from its
commitment to maintain 30,000 poker machines in Victoria, it had better
do it before the takeover battle for Unitab wraps up as it would be
monumentally material information.