Tote details revealed today
The U.K government will today disclose how it will sell its state-owned bookmaker, Tote, putting an end to constant speculation and conjecture over the past months.
It’s no secret that the government would prefer to sell to a partnership between Tote’s existing management and a consortium within the racing industry, but doubts remain over the financing of such a deal.
A bid from the partnership would be heavily financed by debt, leaving one industry insider sceptical about their capacity to invest back in racing, an important factor for the government.
“The only way to finance it is to provide equity, who from?" said the source. “And how would the equity providers get a return?”
However, if the government decided the deal was not in the best interests of racing, Gala Coral are waiting in the wings, ready to pounce. They are prepared to offer £405 million for the company, meeting a valuation set by PricewaterhouseCoopers. They have also offered the government an alternative deal, putting a bid of £325 million on the table just for Tote’s betting shops.
A third interested party is Interactive Gaming Holdings, headed by Tote’s former chief executive, John Heaton.
Tote’s business is made up of 540 betting shops, 59 betting shops at racecourses and the U.K’s pool betting system. Profits for Tote in the year to March 31st were £20.7 million, with £10.7 million invested back into racing.
Editor, Jackpot.co.uk - 2006-12-15 11:29:23