Tote sale still faltering
The sale of the state-owned bookmaker, the Tote, has faltered once again after government ministers have been advised not go ahead with a knock-down £320 million sale of the business to a racing consortium.
The warning comes from the government’s advisors, PricewaterhouseCoopers (PwC), who have told ministers that the valuation is too low and the deal would be at risk of being vetoed by the European Union (EU) as it would breach EU state aid rules – exactly what happened many moons ago when the government first decided to sell Tote.
The government are in a tricky position; they have made a manifesto pledge to sell Tote to the racing industry but a consortium, made up of Tote management and staff, the Racecourse Association and the Racehorse Owners Association, have found it hard to come up with a realistic valuation of £400 million.
Matters have not been helped with the interest in the business from Gala Coral, the bookmaker and casino operator, who have said they would be willing to cough-up £405 million for the Tote.
The consortium’s bid is being backed by Lloyds but, after originally planning to provide £330 million of the required equity, it is thought they will now only provide £250 million.
However, there are concerns that should a deal go through, the Tote would immediately be burdened with debt – and that would not be inline with the government’s pledge to sell the Tote to the benefit of the racing industry.
Editor, Jackpot.co.uk - 2007-11-13 11:08:30