Tote raises pounds 400m to bid for Coral
Friday 16 October 1998
The bookmaking chain has raised the money from a number of City institutions and venture capitalists and plans to launch a bid for the 891 Coral outlets in the middle of next month. Coral was put up for sale last month after the government's decision to block Ladbroke's pounds 363m takeover of the chain from brewing giant Bass on competition grounds.
Peter Mandelson, the Secretary of State for Trade and Industry, ordered the hotel and leisure group to sell the chain within six months and urged the company to look for a single buyer.
The Tote's decision to embark on a fund-raising exercise came after talks over a joint bid for Coral with rival Stanley Leisure were abandoned. Under the original plan, Stanley Leisure would bid for the whole of Coral and then sell around 100 shops to the Tote.
However, sources close to the Tote, the UK's fifth largest bookmaker, said that it had decided to boost its presence in the pounds 6bn-a-year betting market by buying the whole of Coral.
"We are in to buy Coral for Tote and we are happy that we have the money in place to buy the chain," they said. The acquisition of Coral would lead to a four-fold increase in the number of the Tote's shops from 240 to more than a 1,000.
Sources said the bid backers were a "pool of blue chip City institutions and venture capitalists groups". They revealed that the Tote had opted for City funding despite receiving a number of offers of support from wealthy racing punters. "There have been offers from friends of racing, but we did not want to be in a position where we depended on individuals," they said.
The DTI's decision triggered interest from a number of buyers, tipped to include Nikko, CVC, Charterhouse, NatWest Ventures and Nomura. Ladbroke is understood to have received up to 16 expressions of interest in Coral and is expected to send out the preliminary bid documents this weekend.
City analysts predict that Ladbroke, the UK's largest bookmaker, will not recoup the pounds 363m spent for Coral. They believe that the tight timetable for the sale and deteriorating market conditions mean the bid will be pitched at pounds 200 to pounds 300m. Ladbroke has been in talks with the Office of Fair Trading in an attempt to extend the sale's timetable, but experts believe that any relaxation of the terms set by the DTI is unlikely.
The bid for Coral comes at a crucial time for Tote. The government is reviewing the bookmaker's position and is expected to announce a partial privatisation by the end of the year. At present, the Tote's shops are controlled by the Home office and all its profits are ploughed back into racing.
- 1 Michelle Rodriguez: Fast & Furious actor apologises after telling 'minorities' to stop taking on 'white' roles
- 2 Raif Badawi, the Saudi Arabian blogger sentenced to 1,000 lashes, may now face the death penalty
- 3 PornHub turns masturbation into energy in bid to save the planet
- 4 Robert Mugabe eats a zoo for 'obscene' 91st birthday party
- 5 The remarkable archaeological underwater discovery that could open up a new chapter in the study of European and British prehistory
Michelle Rodriguez: Fast & Furious actor apologises after telling 'minorities' to stop taking on 'white' roles
British are sexually uptight, dirty and drink too much – according to Spanish book
Raif Badawi, the Saudi Arabian blogger sentenced to 1,000 lashes, may now face the death penalty
PornHub turns masturbation into energy in bid to save the planet
White and gold or blue and black – what colour is the dress? An eyewitness gives a definitive answer
New theory could prove how life began and disprove God
This is what it's like to be dead, according to a guy who died for a bit
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Ukip would cut billions from Scottish budget to fund English tax cuts
Russia's roadmap for annexing eastern Ukraine 'leaked from Vladimir Putin's office'
iJobs Money & Business
£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...
£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...
£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...
£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...