Tatts shareholders are getting a fair deal in the proposed $11 billion merger with fellow gaming group Tabcorp, says independent expert Grant Samuel.
Grant Samuel says the proposed merger, to be implemented by a scheme of arrangement, is in the best interests of Tatts shareholders in the absence of a superior proposal.
The financial advice business says the aggregate interest of Tatts shareholders in the combined group is materially favourable in comparison to the share contributed by them.
"Based on share prices over the three months prior to the announcement of the scheme on 19 October 2016, Tatts shareholders are contributing approximately 56-58 per cent of the value but are receiving a 61 per cent share of the value," Grant Samuel said in the Tatts scheme booklet released on Monday.
"In effect, Tabcorp is 'paying away' synergy benefits arising from the merger to Tatts shareholders to enhance the attraction of the transaction to Tatts shareholders."
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Grant Samuel also said that the advantages and benefits of the scheme for Tatts shareholders outweigh the disadvantages, risks and costs.
One of the key benefits is the creation of a diversified gaming company offering lotteries, wagering and gaming services, with a suite of long-dated licences.
A disadvantage is that Tatts shareholders will have a significantly lower exposure to lotteries and a much higher exposure to wagering.
Tabcorp expects to complete the merger with Tatts on November 1.
It is confident of completing the deal, with Tatts shareholders scheduled to vote on the scheme of arrangement on October 18 at a meeting in Brisbane, before a second court hearing into the merger six days later.
"With substantially all pre-implementation regulatory approvals now in place, we look forward to continuing to work with Tatts to successfully complete the transaction," Tabcorp chairman Paula Dwyer said in a statement.
Tabcorp said the scheme is worth between $4.25 and $4.67 per Tatts share and represents a significant premium over the independent experts' valuation of Tatts shares on a stand-alone basis of $3.68 to $4.00.
Tatts shares were three cents, or 0.77 per cent, higher at $3.94 at 1353 AEST.
Tabcorp shares were 10 cents, or 2.47 per cent, higher at $4.15.
Tabcorp says the merger is expected to deliver at least $130 million in annual earnings from what it calls synergies and business improvements, tech integration, corporate cost savings and other consolidations.
It will take about two years to fully integrate the old Tabcorp and Tatts businesses, Tabcorp says.
