Tabcorp Holdings will be extending Jumbo Interactive's ((JIN)) online lottery re-seller contract agreement for seven years to circa July 2030.
Jumbo Interactive will pay a fee of -$15m on commencement with a service fee of 1.5% of the ticket price in FY21 which will increase to $2.5% in FY22 and 3.5% in FY23 and 4.65% thereafter.
Morgan Stanley notes the fee is a marginal benefit for the company and limits Jumbo Interactive from by-passing Tabcorp as a re-seller until 2030.
Morgan Stanley retains its Equal-weight rating with a target price of $2.60. Industry view: Cautious.
Sector: Consumer Services.
Target price is $2.60.Current Price is $3.34. Difference: ($0.74) - (brackets indicate current price is over target). If TAH meets the Morgan Stanley target it will return approximately -28% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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