21-08-2007 Lloyds TSB to reconsider underwriting the £400m bid for the Tote

The Financial Times reports that worsened market conditions could influence the decision of Lloyds TSB to provide the financing for the acquisition of the state-owned bookmaker. According to insiders close to the transaction, the Lloyds TSB's debt package could prove to be more of a problem than the contribution to be raised by the racing industry.

The UK Government has set September 28 as the deadline for the consortium, made up of the racing industry alongside Tote management and staff, to bid for the bookmaker and pool betting operator. If the consortium's bid collapses, the Government could always sell off the Tote in an open auction or offer it to Coral, which in November 2006 proposed to manage the Tote's pool betting operation on behalf of the racing industry if the Government agreed to sell the Tote's betting shop estate to the Coral Eurobet group for £325m.

In other news, while commercial televisions in the UK expect a multimillion pound windfall following the legalization of gambling ads, Channel 4 said it will cut its coverage of live horseracing if it cannot find a sponsor to replace the Tote.

SIS, supplier of televised racing to UK betting shops, announced a turnover of £102m and an operating profit of £7m for the year ended March 31. The company also sold pictures to At The Races and Ladbrokes Xtra channels as well as to overseas operators for another £25m, with an operating profit of £9m. SISlink, which provides satellite broadcasts, registered a profit of £3.85m on £11.4m in sales.

Meanwhile, Racing UK, co-owner of rival picture provider Turf TV, announced a sponsorship deal with Victor Chandler. "We offer a comprehensive sponsorship package, which will enable VC Bet to maximise its brand visibility across the Racing UK channel and also on our website, teletext service and at the Racing UK racecourses," said Nick Mills, sales director at Racing UK.