Tabcorp and Tatts could still offer good value to investors despite the Federal Court decision to refer their $11 billion merger back to the Australian Competition Tribunal.
The long awaited Tabcorp and Tatts merger was cast into doubt by Wednesday's successful appeal against the ACT decision by the Australian Competition and Consumer Commission.
Deutsche Bank analyst Mark Wilson said there was value in the current share price of both Tatts and Tabcorp, notwithstanding the uncertain timeline and the ongoing embargo around Justice John Middleton's reasons for referring the merger back to the ACT.
Shares in Tabcorp dropped 1.3 per cent to $4.24 on Thursday, while Tatts shares fell 1.4 per cent to $4.02.
The Federal Court decision was "at least a minor negative" for the gaming giants, Mr Wilson said, but Deutsche maintained its buy rating on both stocks.
Whether Tabcorp is able to continue toward its flagged merger implementation date, originally set down for November 1, will depend largely on the tenor of the full court judgement - which remains in confidence for five business days to give parties the opportunity to keep commercially sensitive material from the public domain.
"We do not know how long it will take for the ACT to reconvene, how long they will take to reconsider their decision, nor how much of a delay there will be to the proposed merger timeline, if any," Mr Wison said in a note to clients.
However, Justice Middleton indicated on Wednesday that the ACT would streamline its review by accepting only written submissions and aiming to deliver its determination by September 28.
Tabcorp says it expects shareholders to still have their say on the deal at a meeting scheduled for October 18, pending the ACT review.
Meanwhile, the Federal Court has given the James Packer-backed CrownBet, which also challenged the Competition Tribunal's approval of the Tabcorp and Tatts merger, until Friday to agree with the ACT on what order should be made by the parties in that matter
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