The bookmaking billionaire behind the Betfred empire is in secret talks to sell a big stake in the Tote as it braces for the loss of its on-course pool betting monopoly this summer.
Sky News has learnt that Fred Done, who alongside his brother Peter owns Betfred, is in advanced negotiations with a consortium of racing industry figures to sell a 25% stake in the Tote.
Mr Done would retain outright control of the business following any transaction, according to insiders.
A deal would probably value the Tote at between £125m and £150m, meaning the sale of a 25% stake would cost the consortium more than £30m.
Sources close to the talks, which could be concluded within weeks, said the Betfred chief believed the Tote had a vibrant future despite the impending removal of its presence from the majority of British racecourses in July.
Under the £265m deal that saw Betfred take control of the Tote in 2011, it was granted a seven-year monopoly on pool betting.
Mr Done is said to have been approached in recent months by several consortia keen to buy part or all of the Tote, but is only thought to have become seriously engaged with the investors he is now close to striking a deal with.
The group in negotiations with the Betfred tycoon is understood to be led by Eamon Wilmott, the chairman of Total Performance Data, a provider of technology used in horseracing around the world.
Mr Wilmott, who was on the board of the British Horseracing Authority until last November, is said to be in line to become the Tote’s chairman.
Its chief executive would be Alex Frost, a former Merrill Lynch banker, according to insiders.
The consortium is understood to have pledged tens of millions of pounds to invest in marketing the Tote if it convinces Mr Done to sell the stake.
If concluded, the deal will represent another chapter in the 90-year history of the Tote, which was set up partly at the instigation of Winston Churchill, the future Prime Minister, who at the time was a racehorse-owning Chancellor of the Exchequer.
It remained government-owned until Mr Done persuaded ministers to sell it to him in 2011.
The expiry of Betfred’s exclusive pool-betting licence has sparked a row over the future of on-course gambling, with most racecourses including Aintree, Cheltenham, Goodwood and York planning to launch Britbet, a new pools product.
Mr Done responded to their proposal by announcing the closure of Betfred’s 50 on-course betting shops and the termination of race sponsorships inherited from the Tote.
Only a small handful of tracks, including Ascot and Chelmsford, which is owned by Betfred, have opted not to join their peers in the new pool-betting service.
He is said to be relaxed about the launch of Britbet, believing it does not have the liquidity which the Tote enjoys.
Mr Done is also said by industry insiders to feel that backed by sufficient investment in marketing and technology, the Tote can significantly increase its market share.
The Betfred founder, who along with his brother was said to be worth £1.33bn by last year’s Sunday Times Rich List, is one of the British gambling industry’s most successful entrepreneurs.
His business now operates more than 1,650 shops across the country.
Speculation last year suggested that Mr Done was examining a stock market flotation of Betfred, although that idea was dismissed at the time by people close to the company.
Most of the high street’s bookmaking giants, including Ladbrokes and William Hill, are wrestling with the implications of a looming Government crackdown on fixed-odds betting terminals.
Another big player in the UK gambling sector, Skybet, which is part-owned by the parent company of Sky News, is examining plans for a stock market flotation later this year.
Betfred declined to comment on its plans for the Tote this weekend.