The business pages are full of reports today about Unitab shareholders
pushing for their CEO, Dick McIlwain, not Tattersall’s boss Duncan
Fischer, to run the combined business if the so-called “merger of
equals” is approved by
shareholders at a meeting in Brisbane on Monday afternoon.

However, any move to put a Queenslander in charge of a Brisbane-based
Tattersall’s would only further increase the political risk that
Tattersall’s faces over the renewal of its $2 billion Victorian poker
machine licence in 2012. Why would the Bracks Government look after a
company that causes huge social damage when most of the profits travel
interstate?

Giant-killing South Australian No Pokies independent MP Nick
Xenophon
and yours truly will be putting out a joint press release shortly urging Unitab
shareholders to reject the takeover. I’m going to Brisbane for Monday’s
meeting and will be handing out flyers and arguing for shareholders to
reject the deal because the political risk inherent in Tattersall’s is
enormous.

Why would Unitab shareholders jump into bed with Tattersall’s three months before an election
when poker machines are a hot issue, a new pokies licensing regime
will be hammered out next year and that licence represents 90% of the company’s value?

People Power have decided to be the only party running in the
Victorian election with a policy of not renewing the two duopoly pokies
licences. If we
get the balance of power in the upper house and do better than expected
running on a no pokies policy, the pressure will be right on to rein in
Tattersall’s. Every other opposition party is also pushing hard against
the pokies and there is talk the Bracks Government will soon come out
with its own harder line policy.

This is the first time in Australian corporate history that I can
remember when a multi-billion takeover decision has clashed head-on
with a political election and uncertain government licensing outlook.
The merger deal is a scheme of arrangement that requires approval from
75% of shares voted and 50% of shareholders, so Unitab’s 67,000
retail shareholders have a good deal of power and a couple of nervous
institutions could bring the whole deal down.

Ironically, I was on a panel at the Tabcorp-owned Gold Coast Convention
Centre two weeks ago with two of the key players in this vote, Barclays
Global Investors CEO Justin Wood and QIC CEO Doug McTaggart. They’ll be
getting emails and calls this afternoon before tomorrow’s proxy voting deadline at 2.30pm.


The AFR’s
John Durie speculated today that Monday’s meeting would be
pulled but this will only happen if the proxies are clearly against the
deal and Unitab won’t know this before voting closes. Check out the timetable for events here.