Tote Saga Finally to Reach Conclusion?

United Kingdom
21/04/2008
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This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.

On 5 March the Government confirmed its rejection of the Racing Consortium's bid for the Tote. (click here for Government statement)

The Government is now preparing to sell the Tote on the open market and has appointed Goldman Sachs to advise it. Whereas the Government's original aim was to sell the Tote to racing at 50% of market value, they now state that "the overriding criterion for the Tote's privatisation will be to maximise value for the taxpayer" and instead intend to make available to racing 50% of the net proceeds from the sale. The original intention to sell the Tote to racing at half of its market value fell foul of European state aid rules and, not wanting to repeat this mistake, the Government states that it will now "be considering urgently" how to distribute to racing one half of the net sale proceeds without infringing state aid and other competition regulations.

The Government also invited expressions of interest to acquire the Tote's businesses and these will then be considered by Goldman Sachs. Several companies have already expressed an interest – some in different parts of the Tote's business – but it is likely that the sale proceeds will be maximised by selling off the Tote as a whole. It should be noted that racing is not precluded from putting together a new bid and Paul Dixon, the chairman of the Racehorse Owners' Association, has urged racing to do just that.

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