Betfred founder Fred Done says his offer would make £113m for Treasury, 'strengthen UK racing' and support growth and jobs
Bookmaker Betfred has made a final push to win backing for its £200m cash bid for the Tote arguing the rival offer for the state-owned bookmaker is based on "smoke and mirror" promises.
Betfred's founder and chairman, Fred Done, is slugging it out with Sir Martin Broughton, former British Airways chairman, in what has come down to a two-horse race after years of aborted sell-offs. Broughton's Sports Investment Partners vehicle argues its plan to seek a £200m stock exchange listing will deliver a "significantly higher" windfall for taxpayers.
Ministers are due to review the competing offers for the Tote, which includes 515 betting shops and a pool betting monopoly, at a meeting on Thursday.
In a letter submitted to MPs on Friday, Betfred reiterated that its offer was in cash and would bring "stability". It also noted that Broughton's plan, which is being underwritten by the private equity firm Oakley Capital, was "contingent" on a successful flotation on Aim, London's junior market, and that the chances of achieving a market valuation of £200m were "remote" given the valuations of other listed companies in the gambling sector. Ladbrokes and William Hill trade at multiples of 10 times earnings whereas SIP would be shooting for 25 times earnings.
Betfred said it was in talks with racecourse groups to create a Tote Racing Development Board to meet quarterly and "provide the leadership to strengthen UK racing significantly, and support growth and jobs.
Done claims its plan would make £113m for the Treasury, half of which George Osborne has pledged to return to the racing industry – although this could be blocked by European rules on state aid. Broughton, on the other hand, has promised the industry a 10% stake in the business and a special share dividend arrangement that would deliver a "guaranteed" £11m a year.