Bran­son wants to buy into na­tional lot­tery

Each 20 per­cent hold­ing of prof­itable lot­tery op­er­a­tor Camelot could fetch R1.1 bil­lion

Weekend Argus (Saturday Edition) - - AUCTIONS - By Ku­nal Dutta

BRUISED by his two un­suc­cess­ful bids in the past to run the Na­tional Lot­tery, Sir Richard Bran­son will at­tempt to take con­trol of the cur­rent lot­tery op­er­a­tor, Camelot, as the dead­line passes for the sale of up to 80 per­cent of the com­pany.

Bid­ders have been given two weeks to ta­ble their open­ing of­fers. Ex­perts be­lieve the auc­tion, which is be­ing overseen by the fi­nance houses Green­hill and NM Roth­schild, could re­sult in Sir Richard tak­ing over Camelot.

The move comes as four of Camelot’s five share­hold­ers – Thales Group, Fu­jitsu, Cad­bury and De La Rue – put their 20 per­cent stakes in the lot­tery li­cence holder up for sale.

The fifth share­holder, Royal Mail, is not cur­rently part of the sale process, but in­sid­ers be­lieve it could de­cide to sell its stake to the winning bid­der.

Some es­ti­mate that each 20 per­cent hold­ing could fetch up to £90 mil­lion (R1.1 bil­lion).

Sir Richard, head of the Vir­gin Group, has crossed paths with Camelot twice in the past. Camelot beat his Peo­ple’s Lot­tery bid for the ini­tial con­tract ahead of the lot­tery’s launch in 1994, and in 2000 he failed to ac­quire the re­newed seven-year li­cence.

It is un­der­stood that prospec­tive bid­ders for Camelot are a com­bi­na­tion of trade buy­ers and pri­vate eq­uity firms.

Camelot makes an an­nual profit of around £30m and saw sales top £5.1m in the year to March – its best fig­ures for a decade. How­ever, valu­ing the stakes is par­tic­u­larly com­pli­cated as there are rel­a­tively few in­ter­na­tional lot­tery op­er­a­tors. None­the­less Sir Richard, w h o i s b e l i e ve d t o h ave ap­proached lead­ing char­i­ties to dis­cuss an al­liance ahead of the bid, is clearly aware of the com­pany’s po­ten­tial value to his busi­ness em­pire, which in­cludes fi­nan­cial ser­vices group Vir­gin Money and a ma­jor­ity stake in the air­line Vir­gin At­lantic.

Af­ter winning the first li­cence granted in 1994 by the gov­ern­ment, Camelot re­tained it through the next two rounds. Its lat­est 10-year li­cence be­gan in Fe­bru­ary.

Share­holder Cad­bury, cur­rently the sub­ject of an ag­gres­sive £10.2bn takeover bid by the US com­pany Kraft, is thought to be par­tic­u­larly keen to sell its stake in Camelot, as is the French de­fence and elec­tron­ics com­pany Thales Elec­tron­ics.

More than 20 prospec­tive bid­ders for the ma­jor­ity stake in the lot­tery op­er­a­tor were told they must sub­mit of­fers by Novem­ber 18. Over a quar­ter of to­tal lot­tery rev­enue is al­lo­cated to wor­thy causes, half is paid out in prizes, while 12 per­cent goes to the gov­ern­ment in lot­tery duty. – The In­de­pen­dent

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