By Clyde Mooney
Shareholders in Tabcorp Holdings Limited (TAH) have finally had a chance to assess the two businesses that have emerged after the gaming giant split its wagering, gaming and Keno interests from its casino operation.
Beginning trading on Monday (June 6) on a deferred settlement basis, the new casino wing known as Echo Entertainment Group (EGP) attracted considerable market interest trading over four million common shares and closing at $4.36.
TAH shareholders voted 99.56 percent in favour of the demerger, but EGP prices are believed to be high amid speculation that James Packer’s Crown Limited (CWN) was amassing a sizeable stake.
The demerger saw shareholders receive one standard share in EGP for each share held in TAH, which gave Packer his opening stake in Echo.
The arrangement effectively halved the value of TAH shares, sending them plummeting on Monday when resumed trading saw almost 57 percent wiped off the new TAH’s value as shareholders dumped nearly 17 million standard shares.
Media reports suggested that Packer’s interest related only to wanting a vote in any potential takeover bids that come to the EGP table.
The CWN announcement appeared to discourage trade, with EGP slumping 2.5% during Tuesday’s trading.
The Tabcorp Echo demerger is expected to become official on June 15th following last week’s Supreme Court approval.