Betfred buys the Tote for £265m
NORTH West bookmaker Betfred has won the race to buy the Tote after agreeing to pay £265m.
In a statement the Warrington firm, led by veteran Fred Done, said the deal comprised of an initial £150m followed by further payments totalling £115m. It includes a £25m payment to the Tote’s pension pot.
The company said the acquisition of the state-owned bookmaker would guarantee the horse racing industry £155m over seven years – £11m in the first year and £7m in the following six. Racing will also receive 50% of the net proceeds of the sale, or £90m.
The acquisition will transform privately-owned Betfred, adding a further 4,000 staff and 517 shops to its portfolio. The enlarged group will have 9,000 staff and 1,350 betting shops.
It now plans to establish the Tote Racing Development Board with members from the key racecourse groups to focus on the commercialisation of the Tote. The Tote brand will still be used at all UK racecourses but its betting shops will be changed to Betfred.
Betfred’s chairman Fred Done said: “Buying the Tote has been an ambition for years, so I am absolutely delighted. The Tote is an opportunity I just could not miss. I love racing and I believe we have the greatest in the world. Over the coming months I will develop the Tote’s relationship with the sport into a highly successful commercial partnership.
“I am thrilled and excited by the opportunities ahead, I extend a big welcome to Tote staff and, now this long process is over, I can’t wait to get going with the job of bringing our businesses together.”
The deal is a coup for Betfred given that the British horseracing sector had come out in favour of a rival bid from Sports Investment Partners (SIP) led by British Airways chairman Sir Martin Broughton.
In the war of words in the run-up to the decision Betfred said its bid would protect more jobs and branded the SIP bid as being “based mainly on smoke and mirror promises.”
The sale of the Tote – which was set up in 1928 – has been mooted for more than a decade. Efforts to sell the business for £400m by the previous government were dashed by the credit crunch.
The transaction has been funded by new banking facilities from a consortium of banks led by RBS, Barclays, Santander, Co-op and Yorkshire.
A year ago the Coalition launched the latest process, which began in earnest in November and attracted 18 proposals.
