Arabs eye £500m Liverpool buy-out

[kurtangle01]

Dubai lining up Liverpool takeover
by Daniel Stanton on Sunday, 13 January 2008

Dubai is on the verge of lodging an offer to buy English football giant Liverpool as the current owners are struggling to refinance debt incurred in the takeover and running of the club, UK media reported on Sunday.

Dubai International Capital (DIC), the private equity investment arm of state-owned Dubai Holding, is thought to be preparing a bid of just under $1 billion and negotiations over a possible takeover are due before the end of February, according to UK weekly The Observer.

DIC, together with Zabeel Investments, lost out to Americans Tom Hicks and George Gillett Jr in a bid for Liverpool last February. Hicks and Gillett paid $340 million for the club and agreed to take over $87.7 million of debt, but the takeover was funded entirely with borrowed money.

Hicks and Gillett have until the end of February before a loan that has swelled to around $685.2 million is due to be repaid. The pair, who are personally liable for the loan, are trying to transfer the debt onto the club, but bankers claim this will be almost impossible to do in the time remaining, the newspaper reported.

Bankers say the global credit crunch has made the refinancing much more difficult.

Sources have confirmed to the Observer that DIC remain interested in buying the football club, although when contacted by Arabian Banking & Finance on Sunday DIC had no comment to make.

Sameer Al Ansari, CEO and chairman of DIC, is known to be a Liverpool fan.

http://www.arabianbusiness.com/50805...rpool-takeover

Just a re-hashed story apart from the bit at the end in bold.

[Iceman]

Why are they seperate ? ( Godolphin and us) Sheik Mo likes to be a winner

how much joy would he get from seeing us lift # 19?

When u are as rich as he is you need to get your kicks somehow

[dww]

Why are they seperate ? ( Godolphin and us) Sheik Mo likes to be a winner

how much joy would he get from seeing us lift # 19?

When u are as rich as he is you need to get your kicks somehow

Well the obvious reason is that he was(/is?) setting up to buy us via his investment company. I believe Godolphin is owned separately as his personal passion is for horse racing.

That is not to say that if he took over he wouldn't become excited or invest heavily or anything just that it is much more likely that LFC would be looked upon as a prestigious way to make money.

[sonsofthedesert]

Well the obvious reason is that he was(/is?) setting up to buy us via his investment company. I believe Godolphin is owned separately as his personal passion is for horse racing.

That is not to say that if he took over he wouldn't become excited or invest heavily or anything just that it is much more likely that LFC would be looked upon as a prestigious way to make money.

That is the point I keep trying to make, one is owned and started by him personnaly and his hobby and the other would be bought by an investment company he owns. That is a big difference, if he felt strongly about LFC and wanted to throw money at it he would buy it himself.

[JCase]

I admit it - I want DIC to come in and throw money at us. If we buy our way to the title intially I don't care - I'll gladly argue with prople in the pub when we're Premiership champions.

1) Anything that stops a nigh on 20 year wait for the title
2) Anything that stops the Scum from down the road overtaking our 18 leagues

I'm not proud - I just still want us to be the best. Once we've won it though I'd like to see a long term investment plan in place to make sure we give ourselves the best chance of staying at the top and competing every year, anddeveloping our own (and hopefully local) talent.

If we've going to stop Utd taking over our English titles mantel we need money now - not in 3-5 years time.

You sir are a shameless barsteward and I agree with you 100%

[paulcooper4]

**** the yanks. **** the arabs. **** all these business cunts wanting to get their grubby mitts on my club. Just give me sheik ****faces address and when I become a instant billionaire I will make this club be the force it once was.

p.s. no AFII can you **** have a scouting job, FM2008 is cheaper

[Iceman]

People seem to think that sheik Mo and Dic are seperate.......... no DIC is sheik Mo's personal plaything

He owns Dubai FFS

[Nicey]

Rashid spoke ****

Cheers mate, surprising Rash is usually the speaker of much sensibility

[sinbad]

An Attempt To See Through the Speculation
By Darren Phillips - 14/01/2008 12:42

"Liverpool is the most successful football club in English football history. It exists to win things for its supporters. It deserves to be in the hands of people who support it, who understand its history and legend and who share the enthusiasm and passion of its fans."

"As businessmen, we move on. As fans, we hope that the new owners would share the same vision as we had for LFC and, of course, in realising the new stadium that is so badly needed to ensure the club can continue to compete at the highest level in the Premiership and Europe." DIC statement on pulling out of negotiations to purchase Liverpool Football Club January 2007.

"We are custodians, not owners of the franchise," George Gillett, February 2007.

"At a football club, there's a holy trinity - the players, the manager and the supporters. Directors don't come into it. They are only there to sign the cheques". Bill Shankly

Another Sunday morning and another round of stories relating to matters away from the pitch - yet regarding a situation which seems to be taking its toll on everyone in that holy trinity - players, manager and fans.

The Sunday Times and The Observer amongst others offer two very different scenarios regarding the club's ownership.

In the former regular sports reporter Jonathan Northcroft goes with a short piece regarding confidence Gillett and Hicks have in negotiations to refinance their initial loan to purchase the club as well as build a new stadium possibly as early as next week.

The rest of the piece mentions the architectural issues and then despite doubts over Rafa Benitez's future but says the pair are adamant they will not cut their losses.

This is against a story containing a joint byline attributed to Duncan Castles and Richard Wachman. The first a sports writer the latter of the paper's City desk.

Gillett and Hicks are said to have found both restructuring and attaching the debt to the club itself difficult and with just six weeks left to resolve the issue are prepared to look at all scenarios including a complete exit.

It is noted that the owners could still well manage to organise the finanace but if not Dubai International Capital are waiting in the wings. A £500 million deal is suggested with talks possible before the end of the current month.

A little history of both parties especially relating to the takeover bids is given. Royal Bank of Scotland (RBS) who provided the bridging loan which is due to be called in are said to have requested that each party contributes £20 million to make the deal smoother but at least one of the co-owners is reluctant. An interview or at least a quote was sought but both Hicks and Gillett were said to have declined to make a comment.

Reading between the lines would suggest that RBS would proceed with the loan on seeing the colour of Hicks' and Gillett's money and only somewhere in the region of 12% of the sum borrowed. Any resistance on their behalf of the American owners looks like a desire to keep themselves clear of the debt and heap it on the club despite their promises not to do so when courting the investment.

It could be pointed out that The Observer story has no quotes - nor do The Times just a mention of confidence - but either Castles or Wachman certainly seem to have approached them for a comment. That certainly points to neither of the owners being the source but a confidence in whoever probably Wachman as the financial journalist spoke to - be that within the banking sphere or DIC. The latter have now been approached for comment but at this point are refusing to make any.

The source was always most likely a financial one with Duncan Castles providing the football aspects as background.

Issues relating to the new stadium are mentioned but perhaps the most pertinent passage is the following:

"The global credit crunch has made it harder for Hicks and Gillett to raise new revenues elsewhere and also affected the value of their other assets. Should they fail in their efforts to repay the £350m acquisition debt on Liverpool when it comes due in just over six weeks, there would be the possibility of the next owner of the club becoming RBS."

In other words Liverpool Football Club would technically but not fundamentally be in the same position as Tuesday night's FA Cup opponents Luton Town.

It wouldn't lead to the same consequences. Liverpool would not be in administration as the owners have secured the debts it against the assets they already held not Liverpool FC. Doing so would be difficult in any case as apart from the ground and all land owned such as Melwood a football club worth boils down to pieces of paper - player's contracts which are not easily realisable and unlike bricks and mortar fraught with problems as Leeds United found.

Manchester United of course have a bigger debt and are paying over £40 million worth of interest but their stadium which is actually built and able to yield substantial income every week. As it stands three to four times the revenue Anfield generates on a match day. At this point Liverpool's stadium designed to close that gap is on a drawing board belonging to one of two architects.

In those circumstances it would revert to RBS and Wachovia if Gillett and Hicks could not repay the debt or arrange refinance. Their other assets could also fall to the banks which would support both sides of the story presented in today's papers - a restructuring which keeps them in charge and their other holdings safe and a complete or partial sale allowing a retreat to concentrate of those holdings.

Bringing someone else in alongside them such as the rumoured approach to John Miskelly is unlikely and if the pair who currently hold the reigns cannot always see eye to eye the chance of rows with another investor are increased. Which may back up the lock stock and barrel resale. However, there are few parties able to produce anything like the sum needed. Miskelly and others are certainly wealthy but not wealthy enough. That makes DIC who have previously had an interest and remain unaffected by credit crunches a genuine candidate.

RBS are unlikely to want the club on their books and would much prefer the duo's business holdings across The Atlantic such as meat processing plants and trailer parks which they are able to move on as viable concerns.

In the unlikely event of RBS taking the club they will not be looking for a £150 million profit - probably none at all. That's far from unknown outside financial circles. DIC have gone on the record as stating they would not pay more than the club's worth or be held to ransom when initially bidding and walked away when it looked like that may happen.

Reverting to the banks would lead to a lower sale price. RBS would be unlikely to sell the club at a profit and are more likely to want to cover their liabilities the move on.

Certainly the £500 million mentioned would not be an attractive price and unless DIC are feeling particularly benevolent it certainly wouldn't seem likely come from that quarter.

If they are unable to break the impasse Gillett and Hicks would be obliged to invite offers. There isn't a virtual doubling in value of the initial investment which is where The Observer story struggles purely in the finance discussed but that is only if the £½ billion mentioned is purely related to purchase cost. Most likely the figure includes purchase value and those sums related ground development and wiping out debts.

The situation would not be similar to that at Leeds as they effectively mortgaged the club, not Peter Risdale or the people who held the majority of shares, against future earnings based on continuous Champions League qualification and other achievements.

DIC are unlikely to have started any speculation but may well be monitoring the situation closely. There's no reason why their distaste of earlier treatment should have changed except that RBS would not be so discerning about who they sold to - there is no guarantee it would be DIC no matter how much noise they may have made in the past and may do so.

That may be a possible reason for DIC to do a deal now. Along with that is the presence of Sameer Al Ansari who is a Liverpool fan and would essentially be living every other Red's dream. He isn't the man with the money that's his boss Sheikh Mohammed bin Rashid Al Maktoum who was said to have made the decision to pull the plug on the initial bid to buy when Gillett and Hicks rather than just Gillett alone came in as a viable alternative.

However, as the Chief Executive of DIC Sameer Al Ansari would possibly be de facto in charge. He is smarting from losing out but if reports are to be believed attends games whenever he is in the country and hasn't entirely given up all hope and there remains huge potential in the club.

Those who want to see the back of Gillett and Hicks would note that it was easy for the Glazers to restructure the same finance deal which bought them control at Old Trafford but the financial climate and the nature of the investment are different due to their husbandry of finances.

Just after the takeover was agreed after admitting that his initial hook into the deal was the figures Gillett presented to him Hicks referred to The Glazer Family saying: "He (Malcolm Glazer) showed us how not to do it. And we didn't approach it the same way. We were hand-picked by David Moores to be his successor and we paid the highest price to do it.

"But from everything I have been told, he is not unpopular any more. Human nature is not to like change. It would be easy to demonise the Glazers, but you know, they paid a lot of money to buy something that was successful - why would they change it? Why would we change Liverpool? We want to make it more successful."

It may be that Hicks with his reading of human nature believes attaching debt to the club will be accepted by Liverpool fans in the same manner he believes Glazer has managed it at Old Trafford.

That would be a flawed judgement. One of a number for which The club - Shank's holy trinity - is suffering for.

A summary of the two scenarios before us is that it's easy to point more holes in The Observer story but it contains more detail albeit unsubstantiated by quotes than The Times have ultimately printed very little that is new. Essentially that the owners are confident of restructuring their loans - something which could have been put around by the owners after it became clear that a new story throwing doubts over their ability to restructure after contact from The Observer.

It's all speculation and even internet publication times can't help the quest to point in either direction.

The Guardian/Observer updates at midnight meaning that edition of the paper doesn't go live until that point. The Times put their stories up in the late evening.

There may be a dialogue between the two parties despite the fact they competed for the same prize. There again they may well be using channels such as newspaper stories to set out a position - indicate either an interest in selling or indeed that a purchase may be possible.

Hicks and Gillett would probably want to keep hold to maintain repute or even because they see the long term figures as favourable - money and riches can be seen by the owners but they cannot reach it without borrowing and using the system. In domestic terms it could be likened to buying a car for £3,000 which you know you can sell on immediately for £6,000 by changing the seats and giving it a valet.

However, if you had £1,000 on your credit card and couldn't up the rest with the bank refusing the additional £2,000 even though you can pay it back on sale within days the purchase couldn't be made.

That would leave the road clear for someone with the £3,000 to hand able to nip in but if the seller had stiffed that person once in order to allow a competitor a chance to raise the funds who would be keen to do the business. Only someone who was an enthusiast for the vehicle and maybe that is where those hoping for change could be lucky.

[alunevans]

steve morgan?

if he'd have had the dosh then he'd have been one to consider but he doesn't

[AFII]

People seem to think that sheik Mo and Dic are seperate.......... no DIC is sheik Mo's personal plaything

He owns Dubai FFS

He finances DIC. They may have shareholders and a board but it's Sheikh Mo who has the ultimate say in everything.

[AFII]

I wonder if DIC could use some of their influence so G&H won't get a loan?

Not impossible if you ask me.

[Skillz]

I wonder if DIC could use some of their influence so G&H won't get a loan?

Not impossible if you ask me.

Fair point actually. Not so much DIC, although they would weild enough power, but if the Sheik made a few calls himself I have no doubt he could. He could buy the Bank of Scotland if he really wanted to.

Something very underhanded went on during the last takeover, do not know what but the whole thing stunk to high heaven and without any info I blame Gillett and Hicks.

[CJ]

I bet they long term make money out of Godolphin due to stud fees! breeding those winning horses must rake in a fair amount for him.

and DIC is not his play thing its an investment company. it exists to make returns!

[Skillz]

I bet they long term make money out of Godolphin due to stud fees! breeding those winning horses must rake in a fair amount for him.

and DIC is not his play thing its an investment company. it exists to make returns!

Probably right but I don't think he actually whores his horses out for the cash, just keeps them for himself. Might be wrong but I did read that somewhere.