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Betfred Wins Bid for U.K. Tote
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The U.K. government has confirmed that the bid to buy the state-owned bookmaker, the Tote, has been won by the U.K.’s fourth largest retail bookmaker, Betfred, after increasing its bid with an offer worth £265 million. The auction commenced on November, 2010 and is expected to be completed within the next 30 to 60 days.
The amount accepted by the government from Betfred for the Tote is much less than the £400 million that it was first offered by a consortium of racetrack owners in 2007. Various governments have attempted to privatize the tote during the past 14 years.
Betfred will make an initial payment of £150 million, which is up from the £119 million that it had originally offered for the Tote. Betfred is also required to take on the Tote’s debt of £60 million as well as to pay £30 into the Tote’s pension fund in order to plug the shortfall.
The total value of Betfred’s offer is £265 million which includes an amount of £30 million of withheld government payments. A payment of £90 million will go to the horseracing industry.
Executive Chairman for Betfred Fred Done revealed that buying the Tote had been his ambition for years and that he is absolutely delighted with the purchase. He added that he will develop the Tote’s relationship with the sport into a highly successful commercial partnership in the next few months.
Betfred has also guaranteed £11 million to the racing industry for 2012 as well as a minimum of £9 million a year thereafter and has also offered to create an advisory board with seats for the horse racing industry.
The sale attracted 18 bidders in an initial round and was one of the longest-running sale processes in U.K. history.
