Tabcorp's investors weren't feeling charitable last Thursday when chief executive David Attenborough presented a lower interim profit effected by $43.8 million of one-off costs. The market sell-off pushed shares down 5 per cent (wiping $197 million of their value), and only lower since.
Of that $43.8 million, a fleshy $9.1 million was identified as advisory fees. One can safely assume most of that was related to its proposed takeover of Brisbane-based Tatts Group, and went to its investment bank UBS, whose Kelvin Barry is leading the acquisitor's entreaty. What that much loot gets you in fringe benefits, besides a quick and dirty closing dinner at Global HQ and a few gobfuls of ceviche and Bollinger at the deed signing, is anyone's guess.
But as if exorbitant deal costs weren't touchy enough, Tabcorp also made a hash of its half-year 12.5¢ yield, attempting to offer the Dividend Reinvestment Plan, despite the deed precluding the bookmaker from issuing more scrip while it subsumes the Queenslanders. On Friday, Attenborough's company secretariat had to fire off two releases admitting its shareholders couldn't reinvest their 12.5¢ per unit. D'oh!
We'll never know who advised the board its dividend program could continue uninterrupted by the vagaries of an $11.3 billion transaction. Even so, aren't directors provided with board papers so as to identify these kind of infractions?
