Australia-listed Tabcorp and Tatts Group said on Tuesday that they are in talks to create a A$9.34 billion ($7.1 billion) betting giant, Reuters reports.
According to an investment banker involved in the talks, a transaction could be announced within the next two days.
Tabcorp announced a “Trading Halt Session” on Tuesday in a filing to the Australian Stock Exchange, “pending the release of an announcement by the company.”
Tatts Group made a similar filing on the same day, and both operators did not comment further.
Analysts say the merger would likely be a way to cope with mounting competition from online betting agencies.
“The entry of large global operators such as William Hill and Sportsbet could have helped push a deal across the line as they have taken a sizeable slice of the local wagering market,” said Matthew Felsman, a wealth adviser at AAP Securities, quoted by Reuters.
While the company has not provided any details of the merger’s structure, Deutsche Bank analysts estimate Tabcorp could pay up to A$4.75 per Tatts share in a deal that would boost Tabcorp’s earnings per share by 1 percent.
“Mergers of equals are normally struck based on a stock’s last closing price, so you would assume Tab is a little happier to revisit the deal now,” said Felsman.
Both companies posted modest profit for the 2016 financial year.