Author: By Kunal Dutta
Bidders have been given a two-week timeframe to table their opening offers. Experts believe that the auction, which is being overseen by the finance houses Greenhill and NM Rothschild, could result in Sir Richard Branson taking over the company.
The move comes as four of Camelot’s five shareholders ? Thales Electronics, Fujitsu, Cadbury and De La Rue ? put their 20 per cent 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 estimates are that each 20 per cent holding could fetch anything up to £90m.
Sir Richard, head of the Virgin Group, has crossed paths with Camelot twice in the past. In 2000 he failed to acquire the then-seven-year license, and Camelot had beaten his People’s Lottery bid to the initial contract ahead of the lottery’s launch in 1994.
It is understood that the prospective bidders are a combination of trade buyers and private-equity firms.
Camelot makes an annual profit of around £30m and it saw sales top £5.1bn in the year to March.
However valuing the stakes is particularly complicated, as there are relatively few international lottery operators.
Nonetheless Mr Branson, who is believed to have approached leading charities to discuss an alliance ahead a bid, is clear of the company’s potential value to his business empire.
Camelot won the first licence in 1994 and retained it through the next two rounds. Its latest 10-year licence began in February 2009. The Indian lottery operator Sugal & Damani, which bid unsuccessfully for the license two years ago, is also thought to be taking a close interest in the sale.
Shareholder Cadbury, which is currently the subject of an aggressive £10.2bn takeover by the US company Kraft, is thought to be particularly keen to sell its stake in Camelot, alongside the French defence and electronics company Thales Electronics.
More than 20 prospective bidders for the majority stake in the lottery operator have been told they must submit offers by 18 November. Delays in documentation mean the deadline has been extended a week.
More than a quarter of total lottery revenue is allocated to charities and other good causes, half is paid out to winners as prizes, while 12 per cent is paid to the Government in lottery duty.
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