Tote worth £120m less than hoped
The Government will tomorrow stress its commitment to selling its Tote betting business despite suggestions it may get only about £280m against the £400m it once hoped for.
Heavy going: The Government won't get as much for the Tote as it hoped
In a written statement to the Commons just before Parliament closes for summer recess, the Department for Culture, Media and Sport will say it still wants an open market sale of the 540 betting shops and pools business.
The process will have to be reviewed at the beginning of September if tough financial markets continue.
But many senior industry figures believe political pressure may have again pushed Ministers to kick the sale into the long grass and that tomorrow's statement is a delaying tactic to allow them to dodge a 2001 manifesto commitment to sell the Tote.
Investment bank Goldman Sachs, advising the Government on the sale, is believed to have given an unexpectedly low valuationof what the Tote is likely to fetch in current economic circumstances.
Sources say the suggested price fell dramatically short of the £400m bid submitted last year by a consortium of racetrack owners backed by Lloyds Development Capital, the private equity arm of Lloyds TSB.
This was rejected by the Government because of its reliance on private equity. But when the consortium went alone, its £320m offer fell at the first hurdle.
Those familiar with the process say the Government has been warned that the valuation may be between £260m and £290m.
Though the Tote posted profits of £27.9m on sales of £2.8bn last week, its betting shops underperform rivals. The shops, which include the highly lucrative fixed-odds betting terminals, are being stalked by Gala Coral, Bet Fred, Paddy Power and a host of private equity buyers, including Blackstone, CVC and HG Capital.
Ladbrokes is thought to have an interest in the pools business, as well as in making a joint bid to carve up the betting shops.
Most watched Money videos
- BMW's Vision Neue Klasse X unveils its sports activity vehicle future
- Inside the new Ferrari V12 Cilindri
- 2025 Aston Martin DBX707: More luxury but comes with a higher price
- Land Rover unveil newest all-electric Range Rover SUV
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- Tesla unveils new Model 3 Performance - it's the fastest ever!
- Skoda reveals Skoda Epiq as part of an all-electric car portfolio
- Mini celebrates the release of brand new all-electric car Mini Aceman
- Blue Whale fund manager on the best of the Magnificent 7
- Mini Cooper SE: The British icon gets an all-electric makeover
- Volvo's Polestar releases new innovative 4 digital rearview mirror
- Mercedes has finally unveiled its new electric G-Class
- BBVA goes directly to shareholders as it steps up bid for...
- Vodafone told to boost security as £15bn Three merger is...
- Cameron left red-faced as Greensill sues Government over...
- SMALL CAP MOVERS: Light Science Technologies sales flourish
- Takeover target Wood Group hit by slump in revenues as...
- How criminals could use AI to scam Britons - and what can...
- Bank of England paves way for Britain to cut interest...
- BUSINESS LIVE: UK GDP grows 0.6%; IAG profits take off;...
- Should the Bank of England have cut interest rates...
- My favourite 20 new cars for under £20,000 - by the...
- BA owner IAG profits climb more than sevenfold
- ITV hopes for summer ad boom as it continues to reel from...
- Rightmove expects weaker ad revenue growth as more...
- Bailey pulls his punches on interest rates yet...
- MARKET REPORT: North Sea giant Harbour closes in on £9bn...
- Some estate agents only put forward offers from buyers...
- Families with TWO retired generations will surge to one...
- My uncle has £14,000 in Dart Charge fines despite trying...