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UK Govt Prepares To Auction Tote

Tuesday, 22nd July 2008

In the UK overnight, the government announced "it is preparing to put the Tote up for sale on the open market this autumn," reported racingpost.co.uk. The Department for Culture Media & Sport confirmed it has "already taken steps towards an auction, even though the price tag is likely to be far less than the £400 million (A$840m) it could once have fetched". However Sports Minister Gerry Sutcliffe stressed in a written statement to parliament that no final decision had been made on whether a sale should go ahead, adding the government needed to be certain it was right to offload Tote "in the light of current market conditions". Reports suggest investment bank Goldman Sachs (which was hired in April to advise on the sale) "has valued the 529 betting shops & pools business at between £260-290 million (A$546-609m) amid the current economic climate". The price "is a fraction of the £400m (A$840m) bid submitted last year by a consortium of racetrack owners, which was turned down by the government because it was backed heavily by private equity"; the consortium's 2nd attempt at securing the Tote without support from private equity "was then rejected for being too low, at a reported £320 million (A$672m)". In the latest statement, the government said that "while it was working towards an autumn sale, it would review the plans after completing further 'detailed work' on the company over the summer".

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