The long drawn out takeover saga at Liverpool continues without an immediate end in sight. At one time this month it looked as if it might be resolved, but these hopes were soon dashed. The loans on the club have to be renewed on 6th October and there are increasing indications that the state-owned Royal Bank of Scotland (RBS) is losing patience with the failure to make progress. They may simply step in, boot the unpopular American owners off the board and sell the club themselves.
At one time it looked as if Hong Kong-based Kenny Huang was the front runner to take over the club. He offered the prospect of developing its fan base in the growing Asian market and above all in China. However, there was always a lack of clarity about where his backing came from, as he did not seem to have sufficient funds to close the deal himself.
It was reported that China’s sovereign wealth fund, the China Investment Corporation, was behind the deal but this was denied. It was then rumoured that there was a wealthy investor of Chinese origin in the United States involved, but this was also denied. Huang insisted that he had provided the necessary proof of funds to Barclays Capital who are advising the Liverpool board. Complaining that he was being treated with insufficient respect, Huang walked away, although there are those who think that this was simply a negotiating tactic and he may yet re-appear at a later stage.
At least four other prospective bidders were in the frame, although no one seems to have made a fully fledged offer. The bid favoured by the current owners, George Gillett and Tom Hicks, was fronted by a former Syrian international footballer, Yahya Kirdi. He now lives in Canada and put together a consortium of Canadian and Middle Eastern investors. It was thought that the deal he proposed was particularly favourable for the current owners.
An Indian billionaire Subrata Roy claimed to have been negotiating through his Sahara Group for some months. A wealthy Kuwaiti family was also reported to be interested. The New York-based private equity group, the Rhône Group, which had previously expressed interest, was lurking somewhere in the wings. Former Football League chairman and football dealmaker, Keith Harris, claimed to have a purchaser lined up. Two years ago he had been involved in deal to buy the club involving a mysterious ‘man in the sands’ which had collapsed at the last minute.
If the stakes weren’t so considerable, this would be a tragic-comedy or farce. You could make a television docu-drama out of it. The sequence of events has certainly done nothing for the reputation of the Liverpool chairman, Martin Broughton, brought in to sort matters out. There have been calls from fans for more transparency about events, but this is difficult given considerations of commercial confidentiality.
One of the problems is that the current owners are looking for a high price to recoup their investment and Huang’s offer at £325m was certainly well below what they expected is. Any purchaser will not just had to fund the acquisition but also guarantee that they can provide funds for the much needed new stadium in Stanley Park.
Arsenal appears to be entering a more stable period. With the blessing of the board the Supporters’ Trust has set up a scheme which allows supporters to buy a fraction of a share in the club for as little as £10 a month. There is an upper limit to prevent the scheme being used as an investment vehicle. Anyone who takes part will enjoy the governance rights of a shareholding including being able to attend the annual general meeting and ask questions.
The outright acquisition of the St. Louis Rams by American sports entrepreneur Stan Kroenke makes it less likely that he will launch a bid for the club any time soon. He is just ten shares short of the number at which he would be obliged to make a bid. Unless Lady Nina Bracewell-Smith can sell her shares, and there is no sign of a buyer on the horizon at the moment, it looks likely that the club will continue with four large shareholders which would suit most fans.
The already high interest rates paid by the Glazers on the payment-in-kind notes they used to help fund their purchase of Manchester United have increased from 14.25 per cent to 16.25 per cent. This is because of the application of penalty clauses for a failure to reduce the level of outstanding debt below a stipulated level. Fans are concerned that this will lead to less funds being available for players and their concerns have been increased by reports that some of the shopping malls owned by the Glazer family in the US have encountered problems in the economic downturn. However, it looks as if the Red Devils consortium bid is dead in the water. Interestingly, United have not been able to sell all their season tickets this year, although whether this is because of the recession or fans’ antipathy towards the Glazers is a matter for debate.
Blackburn Rovers look as if they had found their benefactor with a bid launched by Ashan Ali Syed, a wealthy Indian national resident in Bahrain. A Thai consortium has taken over Leicester City, although some of the details of the bid are unclear. One of the most cash strapped sides in the Conference, Forest Green Rovers, has received a substantial injection of cash from a wealthy local green entrepreneur.
In a survey of finance directors in the Premiership, they said they were cautiously optimistic about prospects. However, apart from the £120m net splashed by Manchester City, it’s been a subdued transfer window suggesting that clubs are husbanding their cash.
Wyn Grant is a regular contributor to Albion Road and also the publisher of footballeconomy.com, a website covering the business and economy of the game of football.
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