Prominent investor and major Tabcorp shareholder John Wylie has backed the lotteries and wagering giant’s new chairman Steven Gregg, saying he has no doubt the group will find a top class CEO for what he described as a “global gaming powerhouse”. Chairman Paula Dwyer formally announced her well-flagged retirement on Thursday. She will hand over […]
Prominent investor and major Tabcorp shareholder John Wylie has backed the lotteries and wagering giant’s new chairman Steven Gregg, saying he has no doubt the group will find a top class CEO for what he described as a “global gaming powerhouse”.
Chairman Paula Dwyer formally announced her well-flagged retirement on Thursday. She will hand over to Mr Gregg, the former investment banker and current Caltex chairman, on December 31.
But Tabcorp shocked the market by announcing the retirement of chief executive David Attenborough, who will leave the company in the first half of calendar 2021.
While Mr Attenborough had led the company since 2011, it is unusual for a CEO and a chairman to depart so close together.
But Mr Attenborough, said the completion of the integration of Tabcorp’s merger with Tatts Group meant it was the right time to go.
“The combination with Tatts is now largely complete and, as such, now is the right time to start the process to appoint the next CEO who can work with the board and management team to take the company forward,” he said in a statement, adding that he was determined to see the business through the challenge of COVID, which weighed heavily on its wagering arm.
Mr Dwyer said the appointment of Mr Gregg, who has been a Tabcorp director since 2012, “will provide continuity of leadership and an orderly transition as the Company identifies and transitions to a new CEO.”
That view was backed by Mr Wylie, whose investment vehicle Tanarra Capital is a top 10 shareholder in Tabcorp.
He said Ms Dwyer’s departure was not as a surprise and praised her role in securing the hard-fought merger with rival Tatts Group in 2017, a deal which delivered Tabcorp the lotteries business that has enjoyed strong growth in the last 18 months.
“It was a company redefining transaction for Tabcorp and Paula can take a lot of credit for that,” Mr Wylie said.
He also backed the appointment of Mr Gregg, who he described as being shareholder-focused with a good eye for value.
Tabcorp said a global search for Mr Attenborough’s successor is underway. The managing director of Tabcorp’s wagering business, Adam Rytenskild, is seen as a potential internal candidate, as is relatively new chief financial officer Adam Newman.
But sources said the smart money was on an external appointment.
Executive appointments have been made more difficult by the COVID pandemic, particularly for Australian companies seeking to tap overseas talent pools.
But Mr Wylie said the role would be attractive given Tabcorp’s status as world leader in lotteries and wagering.
“We think there’s a lot of latent value in the company. There’s an interesting opportunity there,” he said.
“You’ve got a good board and good leadership – they’ll find a good CEO.”
While there may be some concern about Tabcorp’s two top leaders departing in the space of six months, ironically Mr Attenborough and Ms Dwyer both assumed their current roles at the same time in June 2011.
The pair initially focused on dragging Tabcorp’s wagering business into the digital age, before announcing the $11 billion merger in October 2016.
It would turn out to be a complex deal. Not only did Tabcorp have to win the support of racing authorities around the country, but it had to survive two challenges on competition grounds. Tabcorp would not take the keys to Tatts Group until December 2017.
While Tabcorp has been able to breathe new life into the lotteries business, improving the performance of the wagering divisions of Tabcorp and Tatts Group has proved challenging, with a complex integration process further complicated by intense competition in the sector and the continued shift towards digital channels.
The wagering integration is now in its final stages, but COVID had provided yet another challenge for the business.
Mr Gregg and his new CEO may field renewed calls from some investors to consider a separation of lotteries and wagering if the latter’s performance doesn’t improve.
Tabcorp shares, which have fallen 21 per cent since the start of the year, rose 4.35 per cent to $3.60 by lunchtime Thursday.