US private equity firm KKR & Co-backed Pacific Consortium has tabled a A$6.15 billion ($4.65 billion) cash takeover offer for Australian lottery operator Tatts Group Ltd, a move that may derail an already agreed merger with Tabcorp Holdings Ltd.
Pacific consortium, whose bid had in December 2016 been rejected by Tatts, has now offered to pay A$4.21 a share in cash, including a fully-franked special dividend of up to A$0.25 a share.
Pacific consortium's offer is on par with Tabcorp's cash and stock bid, based on Tabcorp's closing price yesterday.
Tatts said it continues to recommend the merger proposal with Tabcorp in the absence of a superior proposal, but will assess the new offer from Pacific Consortium.
The Pacific Consortium has received indicative equity commitments of A$4.6 billion and conditional debt financing for the remainder.
Its offer is subject to completing due diligence and the recommendation of Tatts board.
The Pacific Consortium comprises of KKR, Macquarie Group, Morgan Stanley Infrastructure and First State Superannuation Scheme.
Melbourne-based Tatts is one of the largest wagering, lotteries and gaming company operating in Australia in every state and territory of Australia and New Zealand, except Western Australia.
Tabcorp, which had in November 2016 acquired 9.9 per cent stake in Tatts, already sold its Odyssey Gaming Services business in order to get regulatory approval for its planned $11 billion merger with its rival.