Tote sale stalls again
13th November, 2007
Government ministers have been advised not to go ahead with selling the Tote for a knock-down price of £320 million to a racing consortium. PricewaterhouseCoopers (PwC), the government’s advisors, have told ministers that the valuation is too low and the deal is likely to be vetoed by the European Union as it would breach state aid rules. It is a repeat situation of what happened the last time the government decided to sell the Tote.
After making a manifesto pledge to sell Tote to the racing industry, the government find themselves in an awkward position, but a consortium, made up of Tote management and staff, the Racecourse Association and the Racehorse Owners Association found it hard to come up with a realistic valuation close to £400million. Interest from Gala Coral has not helped their cause, as the gambling giant announced that they would offer £405 million for the Tote.
The consortium’s bid has been initially backed by Lloyds, who have pledged to provide £250 million, down from the £330 million originally planned. Should a deal go through, there are concerns that the Tote would immediately be burdened with huge debts, not in line with the government’s original pledge to sell the Tote to benefit the horse racing industry.
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