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SYDNEY, Oct 19 (Reuters) - Australia's Tabcorp Holdings said it agreed to a A$6.36 billion ($4.87 billion) takeover of Tatts Group to create a A$10.44 billion betting industry giant that could help fend off popular online rivals.
Tabcorp, the smaller of the two companies by market value, will offer 0.8 Tabcorp share plus A$0.425 in cash for each Tatts share. That implies a value of A$4.34, representing a 20.8 percent premium to the most recent Tatts closing price of A$3.59 per share.
Australia's two largest non-casino gambling firms are struggling to cope with mounting competition from online betting agencies that have taken off since the deregulation of gambling licences in 2012, and both reported profit falls in August.
The deal, which has been recommended by both boards, remains subject to regulatory approval and a Tatts shareholder vote. ($1 = 1.3050 Australian dollars) (Reporting by Jamie Freed and Tom Westbrook; Editing by Peter Cooney)