Andy Stewart, one of the City's best known horseracing enthusiasts, is backing British Airways' chairman Sir Martin Broughton's bid for the Tote.
This marks a remarkable return to the race for the state-owned bookmaker for Mr Stewart, whose own bid was rejected in January. When his name failed to make the shortlist, Mr Stewart was reported to have said: "We have been politely informed, 'thanks, but no thanks,' which is a great pity for Joe Public and the average betting-shop punter."
However, Sir Martin is understood to have lost the financial backing of buy-out group Penta Capital in the past two weeks. The loss came at a crucial time, as next week Government officials are expected to select a bid for the Tote, which is valued at £200m, or at least trim the shortlist.
Mr Stewart, the founder of stockbroker Cenkos Securities, has agreed to back Sir Martin's Sports Investment Partners . Mr Stewart said: "Yes, Sir Martin and I have joined forces to take the Tote out of the Government's hands. Chris Bell and I are working under his chairmanship." Mr Bell, the former Ladbrokes boss, also failed to get through the first round of bidding.
The City will be excited by Mr Stewart's return to a big name company. Last year, he retired from the Cenkos board just five years after founding the company.
Government adviser Lazard will be relieved that Sir Martin is still in the race, having lost one of the five remaining bidders last month. Gala Coral, at one stage the betting favourite, did not submit a formal offer by the final bid deadline on 25 March.
Other than Sir Martin, this leaves Betfred, the country's fourth-biggest bookie; property tycoons the Reuben brothers; and a management buy-out team through the Tote Foundation.
Ministers are under pressure to sell the Tote to the foundation, which has promised to plough revenue back into the sport, but it is thought to have tabled a far lower bid than its rivals.
Simon Bazelgette, the chief executive of The Jockey Club, has warned that the Tote could be barred from its racetracks, including Cheltenham and Aintree, if a private bidder wins the auction. For its part, the Government has maintained a pledge made by the previous administration to give the industry half the sale money should the foundation lose out.
The Tote, which comprises 500 shops and an on-track betting service, is considered to require private sector expertise to improve its fortunes. Despite a turnover approaching £3bn a year, it made only £22.3m operating profit in 2009.
Next week marks the biggest event in the racing calendar, the Grand National at Aintree. A 150,000-strong crowd is expected at the three-day festival up about 5 per cent on last year. And last month's Cheltenham Festival also saw attendance rise from 219,000 in 2010 to 223,000.Reuse content