Australian firm’s outlook cut

Tuesday, March 2, 2004 | 11:10 a.m.

MELBOURNE, Australia -- Tabcorp Holdings Ltd., Australia's biggest gaming company, was cut to "marketperform" from "outperform" by Goldman Sachs JBWere because of concern it may have less of an advantage than first thought in acquiring Tab Ltd.

In a letter to Unitab Ltd. Friday, a rival bidder for Tab, the New South Wales government said it would let Tab shareholders decide which bid to accept. The government won't pre-empt, intervene or influence the outcome, it said.

Tabcorp last week won the support of the state's horse and greyhound race organizers before releasing details of its A$2 billion ($1.55 billion) offer. The government earlier indicated that it wouldn't approve a sale unless the racing industry supported it. Unitab doesn't have an industry accord.

The government's latest comment "represents a material change to our previous expectations," Goldman Sachs JBWere analyst Matthew Reynolds said in a report. "The government does not intend to intervene in a decision that it considers is ultimately one for Tab shareholders."

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