The two banks will arrange credit facilities of around pounds 200m to back Stanley's offer for the 891 Coral shops, which Ladbroke, the hotels-to- casinos, group, has been forced to sell by the Government on competition grounds.
SG Hambros and CSFB were chosen as the lead arrangers ahead of Barclays Capital, after a series of presentations to Stanley's executives last week. However, Barclays Capital is expected to be in the consortium of banks that puts up the money.
The board of publicly quoted Stanley, which owns around 560 betting outlets in the UK, is awaiting the preliminary bid documents, due to be sent out by Ladbroke this weekend.
The company is understood to be in discussions with its financial advisers over whether it could boost its war chest with around pounds 100m left over from a recent syndicated loan.
News of the banks' appointment came as other bidders were jostling for position less than a week after the Tote, the state-owned bookmaker also vying for Coral, picked Lloyds Bank and HSBC to co-ordinate its own fund- raising exercise.
The two banks will lead a group of City institutions and venture capitalists, which are expected to provide up to pounds 400m for the Tote's bid.
The Tote and Stanley, which scrapped plans for a joint bid earlier this month, will face competition from several venture capitalists - tipped to include Nikko, Charterhouse, Nomura and CVC.
The bid war was sparked by last month' decision by the Trade and Industry Secretary, Peter Mandelson, to block Ladbroke's pounds 363m takeover of Coral from the brewing giant Bass. Mr Mandelson ruled that Ladbroke, already the UK's largest bookmaker with 1,900 shops, would have had a dominant position in the betting market.
The acquisition of Coral would have increased Ladbroke's share of betting shops from 21 to 30 per cent of the total. If the deal had gone ahead, more than one in three bets placed outside racecourses would have been controlled by Ladbroke.
Mr Mandelson said that the Ladbroke's purchase "would damage competition and disadvantage punters". The minister also spurned Ladbroke's offer to sell more than 300 shops to the Tote in an attempt to minimise the anti-competitive implications of the deal.
In a further blow for Ladbroke, the Department and Trade of Industry ordered the leisure group to sell the shops within six months, preferably to a single buyer to create a sizeable "third force" in the pounds 6bn-a-year UK betting market.
City analysts believe it will be difficult for Ladbroke to recoup the pounds 363m paid to Bass. Industry experts suggest that bids will be pitched at between pounds 200m and pounds 300m.Reuse content