October 24, 2008

UK Government Delays Tote Sale As Recession Looms

The UK government announced yesterday that it will not proceed with the open market sale of the state-owned Tote this autumn due to current market conditions. Sports Minister Gerry Sutcliffe said the Tote would be brought to market 'when conditions are likely to deliver value for the taxpayer and the racing industry'.

In a written statement to Parliament, Mr Sutcliffe said it was not appropriate to pursue a sale of the Tote in the current market conditions, and had decided that the Tote should remain in public ownership for the medium-term.

Mr Sutcliffe said: “It is right that the Tote is now given time to grow the business so that any future sale will achieve maximum value. In particular, I would expect the Tote and racing to continue to work closely together for the benefit of the sport and the punter.”

"The government would like to place on record again its warm appreciation of the loyalty and dedication of the Tote’s staff whilst its future has been under consideration,” he added.

The government had previously attempted to sell the Tote to a racing trust in 2005 until it became clear that a sale on that basis risked being denied approval under European state aid and competition rules, as the sale would have been below open market value.

Earlier this year the government confirmed that talks with a racing industry consortium had ended due to the bid not meeting the Tote's market value of £400 million, as set by independent consultants Pricewaterhouse Coopers.

With more than 4,000 employees, over 540 shops and a major presence on the 59 racecourses in Britain, potential suitors for the state-owned bookmaker are thought to include The New Football Pools operator Sportech plc, Gala Coral, Betfred, and Paddy Power plc.

Mr Sutcliffe reaffirmed the government's view that it should remove itself from detailed involvement in the affairs of the racing and bookmaking industries.

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