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Just two bidders left in the race to acquire state-owned betting group

Posted 5/21/11 :

TOTE ACQUISITION INTO THE FINAL STRAIGHT (Update)
 
Just two bidders left in the race to acquire state-owned betting group
 
Just two bidders remain as the acquisition process for the UK government owned Tote betting group entered the final phase this week.
 
The British media reports that Fred Done's Betfred group is a strong contender and has the funding in place to make a cash bid around GBP 200 million.
 
Rival bidder Sir Martin Broughton is in a stronger position since Oakley Capital, a private equity group, agreed to underwrite his Sport Investments Partners proposal. Oakley has agreed to take a 25 percent stake in the Tote if government ministers agree to SIP’s offer.
 
The racing industry appears to support the SIP bid, which will probably involve taking the Tote public; a statement issued on Thursday by the British Horseracing Authority, the Racecourse Association and the Horsemen’s Group said its discussions this week with the two bidders had done nothing to change its mind.
 
“We respect Betfred’s bid, and Fred Done’s desire to grow his business and increase further his presence on the British high street,” an industry statement declared, adding that racing would continue with existing commercial deals with Betfred.
 
“But the Tote is and should be different. Any sale would grant a monopoly on pool betting on our product. We do not wish to see what is currently a stakeholder relationship, operating right across the sport and in particular at all our 60 racecourses and a key attraction for racegoers, turned irrevocably into one of a customer/supplier.
 
“SIP’s financial details satisfy government’s criteria and provide more certainty to racing, but just as importantly as this, its bid ensures a continuation of the principles behind the Tote.”
 
Sir Martin said this week: “We were delighted to see the unequivocal support of racing and we were delighted to be able to go back to government to give them certainty on funding by getting our bid fully underwritten.”
 
The man behind Oakley, Peter Dubens, founded internet business Pipex, ultimately selling for GBP330 million. Last year, he sold another enterprise, web group Host Europe, for GBP222 million. He is known to the racing industry through UK Betting, an online gambling website that was bought up by BSkyB in 2006.



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