Camelot prepares to bid for Tote sell-off

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The Independent Online
TRADE BIDDERS have pounced on the Government's pounds 12bn privatisation programme just days after it was announced, with both Camelot and the National Grid declaring their interest in buying control of state assets.

Camelot, the National Lottery operator, said that it would "definitely be interested" in taking over the running of the Tote, the nationalised business which runs pool betting at race courses.

Camelot said there was a compelling logic to a takeover of the Tote. Both businesses involve advanced technology and a requirement to pass on a portion of the profits. A large chunk of profits from the Tote - pounds 8.7m last year - is ploughed back into racing.

Close behind the lottery operator was the National Grid Group, which operates the country's electricity transmission systems. National Grid yesterday confirmed its interest in buying the 51 per cent stake in National Air Traffic Systems put up for sale by the Government.

A spokesman for National Grid said: "We are potentially interested because of the fit with our core skills and experience but it is incredibly early days."

It also emerged that National Grid had told the Government of its interest in the air-traffic control group weeks before Gordon Brown, the Chancellor of the Exchequer, announced the sell-off last Thursday.

National Air Traffic Systems (Nats) is believed to be worth up to pounds 600m. However, its price could be depressed because of problems with its computer systems. The company would require heavy investment because of the need to cope with increasingly crowded skies. Some have suggested that this could amount to more than pounds 100m a year.

The Government has still not revealed whether it would be prepared to sell either the Tote or Nats direct to trade bidders. It is likely that other options, such as selling securities based on the steady income stream of either business, would be considered.

Executives at National Grid believe that the company is well-placed to manage air-traffic control and gain the confidence of both airlines and passengers. Both businesses involve the operation of complex software systems in real time, and both have to cope with sudden changes in demand and supply.

National Grid is increasingly keen to diversify in the light of tough regulation of its core business, where profits have been hit by price cuts demanded by regulators. David Jones, the chief executive, has set the company the goal of drawing 30 per cent of its earnings from non-core businesses by 2000.

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