Tote raises stakes with £20m bet on discounted Betfred buyout

The Tote is asking shareholders to wager another £20m on its future growth as it formally severs ties to Betfred, the on-course betting group’s former owner.

Sky News has learnt that The Tote is seeking to raise the funding through an equity issue that will be undertaken at a substantial premium to its last valuation.

Sources said on Tuesday that executives at The Tote were in negotiations with Betfred to bring forward the final instalment of a payment owed to the Warrington-based bookmakers.

The earlier-than-expected payment would be made at a substantial discount to previously agreed terms, according to one source familiar with the transaction.

Last December, it tapped investors for £20m to fund the diversification of its business into football.

The Tote is owned by a consortium of high net worth investors, including Lord Spencer, the former Conservative Party treasurer and ICAP founder.

Alizeti Capital, the investment vehicle used to acquire the business, took over the Tote – one of the most betting industry’s most famous names – in 2019.

Since 2011, it had been owned by Betfred, which bought the previously state-owned business for £265m.

The Tote is said to have performed strongly since the resumption of racing in June 2021, aided by a new consumer-facing website and a number of international partnerships.

Positioning itself under the umbrella of Together for the Tote, Alizeti comprises a group of racehorse owners and breeders, and has enlisted support from leading trainers and jockeys, such as John Gosden OBE and Frankie Dettori.

The Tote was set up partly at the instigation of Winston Churchill, who at the time was a racehorse-owning chancellor of the exchequer.

Since the most recent change of ownership, it has introduced a series of innovations, including a Tote guarantee that winning bets on UK and Irish racing will never pay out less than the industry Starting Price.

It has significantly increased the number of World Pool days at Royal Ascot and British Champions Day, when the Tote pool liquidity with Hong Kong and other leading racing territories.

The Tote believes it can substantially grow its share of the UK betting market by investing in new technology during a period when high street bookmakers are facing growing regulatory and financial pressures.

The company is run by Alex Frost, a former Merrill Lynch trader.

A spokeswoman for The Tote said: “We continue to make significant progress with our plans to rejuvenate the Tote.

“The business is profitable and has great momentum, having seen the UK host pool profit grow by 40% since acquisition.

“World Pool has become an established and profitable new business model and the international business has doubled.”

The company confirmed that shareholders were being invited to acquire shares at a price more than 30% higher than its last equity-raise.

“This reflects the progress that has been made and the exciting times ahead with the additional funds allowing us to make further investment in the business, continue exciting product development and pay the final deferred consideration costs in acquiring the business,” it said.