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Betfred has acquired the UK Horserace Totalisator Boar

Posted 6/3/11 :

A long running race comes to an end
Its official, UK Bookmaker Betfred has acquired the UK Horserace Totalisator Board (Tote) for GBP 265 million announced the UK Government's Department for Culture, Media and Sport, this week.
The announcement clarifies the Tote's future to its employees with assurances on jobs and pensions and will benefit racing to the tune of GBP 155 million.
“Most people can’t understand why, in the modern world, the Government should be even a part owner of a bookie,” said Gambling and Racing Minister John Penrose. “So we pledged last year to end years of dithering and resolve the future of the Tote, and today we have done just that.”
A number of undertakings Betfred has agreed to provide include the continued payment of the Levy to racing even if part of the Tote business moves offshore and that the pool betting part of the business will not be sold off.
Among the specific terms of the deal:
-     Betfred has agreed to pay a headline value of GBP 265 million for the business. This is comprised of an initial payment of GBP 150 million and deferred amounts, including accrued interest, of GBP 115 million;
-     After deductions including debt and pensions, the net equity value to be paid to Government by Betfred is over GBP 180 million;
-     The taxpayer will retain over GBP 90 million as its 50 per cent share of the net proceeds of the sale;
-     Racing will receive over GBP 90 million as their 50 per cent share of net proceeds from the sale (use of which will be subject to compliance with state aid regulations).
      In addition, Betfred has committed to making commercial payments to racing of GBP 11 million to March 2012 and an expected GBP 9 million annually over the following six years;
-     The Tote Pension scheme will benefit from a GBP 25 million upfront contribution to the plan; and
-     Tote employees will have assurances on jobs and an end to many years of uncertainty.
As part of the sale process Betfred will receive an exclusive seven year licence to operate Pool betting operations on all UK racecourses, one condition of which is a requirement to provide pool betting on every approved racecourse in the country.
Betfred have also publicly committed to the establishment of a Tote Racing Development Board with racing to help run the pool and foster wider collaboration. The Tote brand will remain on all UK racecourses.
Culture Secretary Jeremy Hunt added: “It was a closely fought contest which has ended up giving the Tote business and the racing industry the certainty they have been looking for. Of the GBP 265 million in the headline price only just over GBP 90 million will end up being paid to the Treasury. So this deal has been carefully calculated to make sure that the interests of racing, Tote employees and the Tote Pension Fund were given the greatest possible weight.”
Completion of the sale is subject to consultation with employees and is expected to take one to two months.

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