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By Nick Harris
6 October 2010
Liverpool’s potential new owners, New England Sports Ventures, have proposed buying Liverpool in a £300m deal that will involve a cash injection of £240m to clear most of the club’s debt, sportingintelligence can reveal. This should alleviate some concerns among fans that the club is heading for another leveraged buyout. (SoS fans’ group initial response here)
As the sales process remains fluid – but complicated by legal action by Tom Hicks and George Gillett (more from earlier / plus some legal opinion) – we can also reveal:
- New England Sports Ventures (NESV), owners of the Boston Red Sox, were the preferred bidders of RBS bank, which was owed a large chunk of £237m by Hicks / Gillett / Liverpool. The other “credible” bidder’s identity remains unconfirmed.
- The former Arsenal managing director, Keith Edelman, has been working on the deal as an advisor to RBS, but solely for his knowledge of football finance, and will have no role at Liverpool.
- NESV has promised £240m in cash to wipe out the majority of the monies owed to RBS and Wachovia. This is cash, not borrowed money, and therefore not to be leveraged against any Liverpool assets, sources say.
- Some £60m of debt will remain in the club (guaranteed by NESV), with approximately £40m of that earmarked for stadium redevelopment, and £20m for cashflow.
- The £240m debt clearance plus assuming responsibility for the other £60m gives the £300m valuation for the deal.
- NESV has “an open mind” on whether it will build a new stadium. The Red Sox’s Fenway Park was redeveloped rather than the Sox being relocated, for example.
- Executives from NESV have already had at least one “clearance” meeting with the Premier League to discuss meeting “fit and proper” owners requirements, say sources Stateside. The Premier League is expected to release a statement later today to make the general point it is undertaking its own checks.
- Sportingintelligence understands NESV has already provided the Premier League with proof of funds and a sustainable business plan and the League should be able to “green light” the sale from its own point of view by Friday. 2pm update, UK time, statement from Premier League just dropped: “The Board of the Premier League has been kept fully informed of developments regarding the potential sale of Liverpool FC by the Chairman and senior Executives of the Club and has, accordingly, been made aware of a number of potential prospective owners in recent weeks. We can confirm that Liverpool FC has formally notified the Premier League of an intended change of control and that the Board has undertaken to complete all the necessary processes by Friday 8 October so that the sale of the Club can proceed.” Update ends
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Liverpool’s chairman Martin Broughton has said today: “This was frankly [Hicks and Gillett’s] last chance to leave Liverpool with their heads high and they have chosen to go this route.
“It is a difficult issue. Part of me taking on the role – and I was appointed by Tom and George – was that they gave a written undertaking that only I could change the board, they wrote that into the articles of the two companies Kop Football and Kop Holdings.
“They also gave a written undertaking to RBS that they would not frustrate any reasonable sale and this is frankly a flagrant abuse of those two written undertakings.”
“At Fenway they chose not to build a new stadium. They will want to make sure that they do the right thing, but [Liverpool] willl have a stadium which holds 60,000-odd.
“Whether that is the new stadium as designed or not, that is not a commitment, but will we have stadium development? Yes.”
The legal wrangle over whether the board should have been allowed to agree a sale goes on but Broughton is confident it is a battle that can be won.
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