Consortium's £400m bid for Tote finally under starter's orders

A horseracing industry consortium finally submitted its £400m bid to buy the Tote last night.

The consortium, along with Tote management and staff, are understood to have met the Government's valuation of the business - set by accountancy firm PricewaterhouseCoopers - with a bid financed predominantly with debt from Lloyds TSB.

Tote staff and management are thought to be expecting to get around 20 per cent of the equity in the company, although the racing interests remain less than happy with this. The consortium is made up of the Jockey Club Racecourses, which owns some of Britain's most prestigious tracks including Cheltenham, Newmarket, Sandown, Kempton Park and Aintree; the Racehorse Owners Association; and the Racecourse Association.

The bid will now have to secure the approval of the Department for Culture, Media and Sport and the Treasury.

It will also have to satisfy European regulators that it does not violate rules banning illegal state aid which wrecked an earlier plan to sell the business to a racing trust for a knockdown price. The bookmaking industry is less than happy that the Tote was sold to the consortium without being allowed to participate in an auction.

However, a direct complaint to Europe looks unlikely.

Some racing sources remain nervous about the level of debt that is being used to fund the purchase, which they fear could jeopardise the £10m dividend to racing by the Tote.

Funding for prize money from the levy on bookmakers' gross profits has been falling and a reduction in the dividend would exacerbate the sport's funding black hole.