CBD
Australia's most-hated bookmaker, Tom Waterhouse, sure seems to be doing well.
His suits are nicely tailored and his shirts look made of fine cotton. His marriage took place in a picturesque Sicilian village.
And his bookmaking operation, part-owned by dad Robbie, has been splashing cash around, reportedly becoming the highest-spending advertiser in the sports betting industry. His inescapability has made him a voodoo doll for anti-punt activists, but has it paid off?
It's difficult to say. While he's reportedly been offered $500 million for the business, Tom Waterhouse NT, which holds his bookie ticket, doesn't file financial accounts.
But it is possible to say that despite the advertising blitz (and free publicity due to mum Gai's blow-up with well-seasoned adman John Singleton) he doesn't lay claim to a huge slice of punters' money. Totalisator giant Tabcorp still dominates the $25 billion a year wagering market, with about 44 per cent. The rest of the totes hold about 25 per cent, betting exchange Betfair has 6.3 per cent and corporate bookies, of which Tom Waterhouse is just one, hold about 24 per cent.
Industry estimates are that Waterhouse has about 10 per cent of the corporate bookie market, giving him just 2.5 per cent of the total market. This despite spending a reported $10 million - too much for his much larger rivals to spend - on the infamous marketing deal with the Nine Network that catapulted him into lounge rooms, and infamy, as a pseudo-commentator.
Kingmaker role
Canny fund manager Geoff Wilson has emerged as kingmaker in a newly reignited stoush between former Ausbil Dexia workmates Paul Xiradis and Reub Hayes over under-valued investment company Emerging Leaders Investments (ELI).
Hayes, who was one of Ausbil Dexia's owners back in the day, last month tried to turf ELI's board, including Xiradis, but the company rejected his call for a shareholder meeting as "invalid".
On Monday, Hayes said he would call his own meeting at which he would ask shareholders to evict Xiradis, John Evans and John Skippen from the boardroom and replace them with himself, fellow Treasury Group director Peter Kennedy and investment banker Matthew Stubbs. Hayes, who owns 5.7 per cent of ELI through his super fund Solhurst, complained that an $8.2 million capital-raising last month was priced at 82¢, a steep discount to ELI's net tangible asset backing of about $1.01 at the time.
Interestingly, the one-for-four share issue was partly underwritten by Ausbil, which is run by Xiradis and manages ELI's investments. However, despite a shortfall in the capital-raising Ausbil had to lay out less than $200,000 because Xiradis generously put his hands in his own pockets and stumped up an extra $850,000, above his entitlement, to buy more shares. He now owns 4.3 per cent of ELI.
Hayes also complained that shareholders who didn't take up their entitlement have been diluted and Ausbil given a 20 per cent rise in its base management fee.
In addition to changing the board, Hayes wants to declare a special dividend and offer shareholders a buy-back at the company's net tangible asset backing. "I've had lengthy dialogue with the board over the past four months and been stone-walled," Hayes told CBD. "All we're really seeking is for the board to recognise that the shareholders want value out of it."
Given scrip is trading at about 82¢ and NTA is around 97.2¢, Hayes' proposal would seem very attractive for Wilson's Wilson Asset Management, which has bought as much of the stock as it can - 19.9 per cent.
Wilson was inscrutable on Monday when CBD asked his intentions. "What I find is the best thing is to see clearly what their [Solhurst] proposition is and clearly what the ELI proposition is," he said. Pressed, he admitted that if there was a franked special dividend, "we'd enjoy that", and that it would "be tough" to resist a buy-back at a premium.
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Frequently Asked Questions about this Article…
Tom Waterhouse is a well-known Australian bookmaker whose business is part-owned by his father, Robbie. The company behind his betting licence, Tom Waterhouse NT, reportedly attracted a $500 million offer, but it doesn't file public financial accounts, so independent verification is difficult. Industry estimates suggest his operation accounts for roughly 10% of the corporate bookie segment — about a 2.5% share of the total $25 billion-a-year Australian wagering market.
Tom Waterhouse has splashed money on marketing — including a reported $10 million deal with the Nine Network — and received extra publicity from family-related media stories. Despite the blitz, industry data cited in the article show he still holds a relatively small slice of the total wagering market (around 2.5%), so heavy advertising has not translated into a dominant market share.
The article cites a roughly $25 billion-a-year Australian wagering market. Tabcorp is the dominant player with about 44% market share. The remaining tote operators hold around 25%, betting exchange Betfair about 6.3%, and corporate bookies (including Tom Waterhouse) about 24%.
Emerging Leaders Investments (ELI) became the centre of a boardroom stoush. Reub Hayes (who owns about 5.7% through his Solhurst super fund) tried to remove the board — including Paul Xiradis — and replace members with his slate. Geoff Wilson has emerged as a potential kingmaker, and Ausbil (run by Xiradis) manages ELI's investments. Other named figures include John Evans, John Skippen, Peter Kennedy and Matthew Stubbs.
Hayes criticised an $8.2 million one-for-four capital raising that was priced at 82 cents per share, which he claimed was a steep discount to ELI's Net Tangible Asset (NTA) backing. The article references NTA figures around $1.01 at the time of the raise and later around 97.2 cents, while the share price (scrip) was trading at roughly 82 cents — a gap that underpins Hayes' calls for action to unlock shareholder value.
Hayes wants to replace the existing board members with his nominees, declare a special franking-eligible dividend and offer shareholders a buy‑back at the company's NTA. He argues these steps would return value to shareholders given the discount between the trading price (about 82 cents) and published NTA estimates.
Geoff Wilson has been described as a potential kingmaker in the dispute. Wilson Asset Management has accumulated up to 19.9% of ELI stock, giving it significant influence. Wilson said he would welcome a franked special dividend and would find a buy-back at a premium hard to resist, though he was otherwise non-committal about specific moves.
The one-for-four share issue was partly underwritten by Ausbil, which manages ELI's investments and is run by Paul Xiradis. Ausbil faced a shortfall in the underwriting but had to cover less than $200,000 because Xiradis personally purchased an extra $850,000 worth of shares beyond his entitlement. After that purchase Xiradis held about 4.3% of ELI.
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