BETFRED WINS THE RACE FOR THE TOTE
BOOKMAKER Betfred will today be named as the preferred bidder to buy the Tote, the state-owned betting pool, City A.M. can confirm.
The firm is believed to have beaten a rival approach from former Liverpool Football Club chairman Sir Martin Broughton’s Sports Investment Partners (SIP) vehicle, in a deal that values the Tote at more than £200m.
Sir Martin had appeared to be in pole position as late as last week, having secured the backing of the racing industry.
But Betfred last night emerged as the favourite to buy the turf accountant.
The sale of the Tote had become a testing political issue in recent weeks. Sources close to the deal said last night the sale had to be considered by Prime Minister David Cameron, following earlier talks between culture secretary Jeremy Hunt and chancellor George Osborne.
Government lawyers also pored over the fine print of both bids to avoid any possibility the eventual final decision would be subject to a legal appeal, with European Union state aid regulations proving the most complex obstacle.
Although it will become the preferred bidder, Betfred will not immediately get the keys to the Tote’s 517 betting shops.
Betfred, which owns more than 750 stores, still needs to negotiate the final details with ministers.
Both Betfred and SIP were tasked with meeting strict government requirements for bidders.
Any approach for the state-owned bookmaker is required to provide value for the taxpayer, support for the racing industry and to acknowledge the interests of the Tote staff.
SIP had won over the racing community, having secured support from several powerful racing organisations.
It had planned to float the Tote, handing seats on the board and shares to racing industry bodies.
In a spiralling chase to secure the Tote, Sir Martin also improved his bid with the offer of an upfront payment of £77m to the Treasury, as well as an improved £11.5m per year to the racing industry in perpetuity.
Betfred also fought to woo the racing world, vowing to create a Tote “advisory board” with seats for industry representatives.
Led by Fred Done, the winning bookmaker is also thought to have improved its cash offer to the government in recent weeks.
It had looked to pay £113m in net proceeds as well as a £27m payment to the Tote pension fund and a £60m purchase of the Tote’s debt.
Betfred, the government and a spokesperson for SIP all declined to comment.