Oct 19 (Reuters) - Tabcorp Holdings Ltd TAH.AX
* tabcorp and tatts to combine
* pro forma enterprise value of approximately $11.3 billion , revenue of over $5 billion
* Combined group expected to undertake a $500 million share buyback
* transaction expected to be eps accretive (before significant items) and value accretive for both tabcorp and tatts shareholders
* combined group expected to target a dividend payout ratio of 90% of net profit after tax, before significant items
* completion expected mid-2017 following tatts shareholder
* transaction is unanimously recommended by boards of tabcorp and tatts
* combination expected to deliver at least $130 million of annual ebitda synergies and business improvements
* Deal is expected to result in at least $50 million per annum of additional funding to australian racing industry
* transaction implies a value of $4.34 per tatts share
* combined group expected to target a dividend payout ratio of 90% of npat
* deal in which tatts shareholders will receive 0.80 tabcorp shares plus 42.5 cents cash for each tatts share held
* directors of tabcorp and tatts believe transaction represents compelling opportunity to create significant value for tabcorp and tatts shareholders
* tatts intends to pay its shareholders a fully-franked special dividend of 20 cents per share immediately prior to implementation
* David Attenborough will be managing director and chief executive officer of combined group and damien johnston will be chief financial officer
* Board will be comprised of existing tabcorp board of directors with Paula Dwyer as chairman
* Tatts chairman Harry Boon will join board of combined group as a non-executive director
* Transaction costs are estimated at approximately $90 million.
* Both tabcorp and tatts expect to continue to pay dividends in ordinary course until implementation of transaction
* on completion, existing tabcorp shareholders will own approximately 42% of combined group, tatts shareholders will own approximately 58%
* Under implementation deed tatts is able to pay a special dividend of up to 25 cents per share
* Tabcorp - tatts intends to pay shareholders fully-franked special dividend of 20 cents per share immediately prior to implementation of transaction
* australiansuper, one of tatts' largest shareholders, has indicated that it intends to vote its tatts shares in favour of transaction Source text for Eikon: ID:nASX8s8kv5 Further company coverage: TAH.AX