Betfred wins bidding war for the Tote to disappoint horse racing

Former British Airways chairman Martin Broughton's Sports Investment Partners (SIP) vehicle, which was the only other bidder, had planned to list the Tote on Aim and give the industry the chance to own a sizeable stake in it.

But Betfred won the auction in what Culture Secretary Jeremy Hunt described as "a closely fought contest".

After deductions including debt repayments and pension contributions, just over 90m of the total figure will end up being paid to the Treasury, with a similar sum going to the horseracing industry.

The sale - part of wider privatisation of state assets to cut the UK's deficit - is subject to consultation with employees and is expected to complete in about four to eight weeks' time.

The number of job losses as a result of the sale is subject to a guaranteed cap and Betfred has pledged not to make more than 150 redundancies across the combined 9,000-strong group over the next 12 months.

Gambling and racing minister John Penrose said the government had "bent over backwards to deliver a good deal for racing".

But Paul Roy, chairman of the British Horseracing Authority, said he was disappointed by the decision.

"The announcement was not our preferred outcome, but we will now work with Betfred and the government to ensure their commitments are delivered upon, both in relation to the Tote and other areas of industry reform."

Betfred's executive chairman Fred Done said he had harboured ambitions to buy the Tote for many years.

"The Tote is an opportunity I just couldn't miss," he said. "Over the coming months I will develop the Tote's relationship with the sport into a highly successful commercial partnership. Now this long process is over, I can't wait to get going with the job of bringing our businesses together."

Done's betting empire was launched from a single shop in Salford in 1967. Taking on the Tote shops, which are to be rebranded, will increase the size of its estate to more than 1,350 shops.

Wigan-based Tote, which was founded in 1928, has 517 shops, an online business and an on-course betting business which operates at all UK racetracks. It employs more than 4,000 people and last year injected around half its profits back into the industry.

Ian Barlow, chairman of the Racecourse Association, added: "The task for the racecourses now is to sit down with Betfred with a view to negotiating acceptable commercial terms both for racing and for the individual courses".