Gala Coral gambles on Tote offer

The Tote was founded in 1928 by Winston Churchill

Gaming group Gala Coral has made a bid for UK state-owned bookmaker the Tote which values the entire business at £405m ($770m).

Gala has said it would prefer to bid solely for its 540 betting shops, which it values at £325m.

But it added that it did have other plans to buy the business, depending on how the government views its proposals.

PricewaterhouseCoopers, who are advising the government on the sale, put a £400m price tag on the Tote.

Under Gala's alternative plans, it could offer £405m for the entire business - then sell on Tote's on-course betting, telephone betting and internet betting operations. Gala values the division at £80m.

However, it has also said it may offer £325m for the entire business, hold onto the betting shops, then hand over the rest of Tote's operations to the UK racing industry. Gala has offered to run this part of the business on an at-cost basis.

'No bids invited'

However, the Department of Culture, Media and Sport said the government "had not yet invited any bids for the Tote".

It added that it planned to announce how it would meet the government's desire for a sale of the Tote that would benefit the racing industry within the next month.

Gala's bid is believed to be higher than an offer made by a consortium from the racing industry earlier this year.

The consortium, led by the Racecourse Holdings Trust, is thought to have offered between £310m and £320m for the Tote. The bid was rejected by the government.

A new racing industry consortium is now understood to be preparing a bid to challenge Gala's offer.

Last year, the European Commission blocked the sale of the Tote to the Racing Trust after it said the sale price was too low and so could constitute "state aid".

Last year, Tote's profits fell 3.3% to £23.4m, but its turnover grew 16.9% to £2.21bn as more money was gambled.