This week, Tote bookmaker, the British state owned company, due to Britain’s government’s declaring that it has declined a tender bid from a consortium of horse racing and intends to sell the company publicly. The bids would be taken into consideration at once, according to the government spokesperson.
The tote which is responsible for operating the pool betting system in Britain since its establishment in 1928, and maintains approximately five hundred and forty betting shops and has representatives at the entire number of fifty nine British racecourses, as well as a division of betting on the Internet.
According to reports from Reuters, for more than three years the Tote’s destiny has been unstable, and that the decision made by the government does not find favor among the racing community in the wake of its promise to sell the industry in 2001. Four years later that plan went under when the European Commission announced that is required state assistance as its price had fallen so low.
It was reported that the Tote was evaluated for the government by PricewaterhouseCoopers at four hundred million pounds sterling and on that basis the industry had to come up with a bid. This was answered in 2006 by a primary offer of about three hundred and twenty million pounds which was not accepted. A partnership was then formed between the consortium and the management of Tote and Lloyds TSB bank’s private equity division to offer at the beginning of 2007 another bid.
According to reports, the government, this time, was not pleased with the standard of involvement of Lloyd’s TSB and the consortium, and received instructions to reconstruct the plans, which led last September to a new bid being offered which that too has been refused.
A large number of individual and companies is expected by industry watchers to find interest in the Tote. Huge companies such Ladbrokes and William Hill are likely to be ruled out by the competition rulings, however, the private company Gala Coral has already proposed to purchase the enterprise, while among those companies anticipated to make an attempt are BetFred and Paddy Power.
A drop in business as a result of the economic situation is feared in Britain, and this could affect however the quotation price the potential buyer is willing to offer. According to quotes by Reuters, between two and three hundred pounds were offered. Paul Dixon, the president of the Racehorse Owner’s Association, proposed a different guidelines idea, namely, to divide up the Tote between an interested industry partner and the horse racing industry.
Posted on: March 12, 2008