By Mike Cherney

SYDNEY--A consortium of investors including private-equity firm KKR & Co. and Australian bank Macquarie Group Ltd. made an all-cash offer to buy Australian wagering firm Tatts Group Ltd., which already agreed to merge with rival Tabcorp Holdings Ltd.

The so-called Pacific Consortium, disclosed Wednesday, is now offering A$4.21 in cash to acquire Tatts and values the company at A$7.2 billion on an enterprise-value basis.

It comes after Tatts rejected a previous offer from the consortium, which proposed splitting its wageringand gaming business from its lotteries operation. That bid involved investors getting a cash payment of A$3.40 a share, and one new share in the wagering and gaming business ahead of a sale or listing on the Australian Securities Exchange. Shares in the wagering and gaming business would be worth between A$1.00 and A$1.60 each, the consortium said.

Tatts said it would review the new offer and update the market. In the meantime, Tatts said it continues to recommend the proposed Tabcorp deal absent a superior offer.

Tabcorp is in the process of seeking regulatory approval for the merger. On Tuesday, it said it had made plans to divest one of its businesses, Odyssey Gaming Services, to help address regulatory concerns.

A merger between the two companies would help them fend off online competition from offshore rivals, and give Tabcorp access to Tatts's lucrative lotteries business.

-Write to Mike Cherney at mike.cherney@wsj.com

(END) Dow Jones Newswires

April 18, 2017 20:40 ET (00:40 GMT)

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