The operator’s offer includes an initial payment of ZAR875m, followed by a deferred ZAR50m consideration which will be paid upon certain EBITDA based performance targets being met by the horseracing business.

If Betfred’s offer is accepted, it will provide a loan of ZAR650m to be used by Phumelela to help pay its debts, which will be paid in two phases, with the first ZAR250m to be advanced within five days after the business rescue plan is approved.

The horseracing operator has until 1 September to accept the offer. Betfred vowed that all business and staff jobs will be secured if the deal is completed and plans to keep all of the assets of Phumelela together, to benefit racing and betting in South Africa.

Betfred said: “Our intention with this offer is to reinvigorate a struggling industry and, in doing so, facilitate economic growth, job creation and access to international markets and best practices.

“Furthermore, the investment by an experienced multinational corporation into South Africa is likely to result in enhanced growth and opportunities for South Africa.”

Phumelela had previously announced a business rescue plan to sell its horse racing business, after the coronavirus pandemic increased its debts to more than ZAR600m. Betfred’s offer acts as an alternative to Mary Oppenheimer Daughters (MOD) plan to acquire the horseracing operator.