Originally posted by lfc4ever
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Sunday, 10 December 2006
Moores stands in way of Liverpool FC bid
by Frank Kane
Dubai International Capital, one of the investment vehicles of the
Dubai government, is leading the race to buy Britain’s Liverpool
Football Club – but several problems could yet stall the deal.
DIC executives travelled to Britain last week to meet with their
Liverpool counterparts and advisers to try to resolve the tricky
position of David Moores, the Liverpool chairman, who has a 51%
shareholding.
Both Liverpool, controlled for decades by the Moores family, and DIC
confirmed last week they were in exclusive talks about a financial
package to take control of the debt-laden club, which is still
regarded as one of the great brand names in international sport.
DIC chief executive Sameer Al-Ansari said: “We will be commencing due
diligence in the coming days and continuing discussions with Liverpool
which may or may not lead to a formal offer.
“We are supporters – of the game and of the club,” he added.
“Liverpool’s investment requirements have been well-publicised and we
hope we can agree a deal that will provide the club with the funds it
needs, both on and off the pitch.”
The prospects of a deal were also talked up by Liverpool chief
executive Rick Parry: “This is the latest step on the road of finding
the long-term investment that the club needs,” he said. “This is very
important in terms of the proposed new stadium, which is key to plans
for the regeneration of the local community.
“On the pitch, Liverpool remains focused on winning and, here again,
this is all about doing a deal that gives us the long-term resources
to do that,” Parry added. But sources close to the negotiations
between the two sides do not think a deal is close to being tied up,
and suggest it may take until next year to complete the due diligence
process.
The Reds’ cash needs are urgent and apparent. With some US$157m of
bank debt and another US$393m the estimated cost of a new stadium, the
club needs a financial injection to allow it to compete at the top
level of the European game. It has been noticeably falling behind
well-financed clubs like Chelsea and Manchester United in recent
years.
DIC is willing to invest around US$884m, but advisers believe there is
as yet no agreement on a central issue, which could still derail the
deal: the value put on his controlling 51% per cent stake by chairman
David Moores.
Liverpool shares are not traded on an official stock market, but the
most recent transactions have valued them at US$6485 each, valuing the
clubs share capital at around US$226m.
Moores is thought to have asked DIC for at least US$8845 a share, to
reflect a takeover premium for his stake. Dubai's DIC believes this
money would be better spent on investment in the new stadium and
players.
“It is an issue which will have to be successfully negotiated,” said a
Dubai adviser. “If he [Moores] holds out for too much he might just
negate the benefits of the deal.” Also under discussion are the other
major shareholders in the club. Businessman Steve Morgan – who has
been critical of the Moores regime in the past – has around 10%, while
broadcaster ITV has a similar stake, inherited from the old Granada
television group.
Moores’ uncompromising stand on price has been a stumbling block in
the past. George Gillett, owner of the Montreal Canadiens ice-hockey
team, proposed a similar deal to DIC’s earlier this year, only to have
it knocked back by Moores' determination to get full value for his
shares.
One possible compromise would see DIC buying a minority, but
controlling, stake and investing capital directly into the new
stadium. Moores would remain a shareholder, possibly with an honourary
position at the club.
“If he stays on it might make Liverpudlians more comfortable about the
new owners,” said one adviser. However, this arrangement is unlikely
to comfort DIC, which has a track record of seeking full control for
most of its other investments, like the Tussauds waxworks tourist
attraction and the Travelodge hotel chain.
Moores stands in way of Liverpool FC bid
by Frank Kane
Dubai International Capital, one of the investment vehicles of the
Dubai government, is leading the race to buy Britain’s Liverpool
Football Club – but several problems could yet stall the deal.
DIC executives travelled to Britain last week to meet with their
Liverpool counterparts and advisers to try to resolve the tricky
position of David Moores, the Liverpool chairman, who has a 51%
shareholding.
Both Liverpool, controlled for decades by the Moores family, and DIC
confirmed last week they were in exclusive talks about a financial
package to take control of the debt-laden club, which is still
regarded as one of the great brand names in international sport.
DIC chief executive Sameer Al-Ansari said: “We will be commencing due
diligence in the coming days and continuing discussions with Liverpool
which may or may not lead to a formal offer.
“We are supporters – of the game and of the club,” he added.
“Liverpool’s investment requirements have been well-publicised and we
hope we can agree a deal that will provide the club with the funds it
needs, both on and off the pitch.”
The prospects of a deal were also talked up by Liverpool chief
executive Rick Parry: “This is the latest step on the road of finding
the long-term investment that the club needs,” he said. “This is very
important in terms of the proposed new stadium, which is key to plans
for the regeneration of the local community.
“On the pitch, Liverpool remains focused on winning and, here again,
this is all about doing a deal that gives us the long-term resources
to do that,” Parry added. But sources close to the negotiations
between the two sides do not think a deal is close to being tied up,
and suggest it may take until next year to complete the due diligence
process.
The Reds’ cash needs are urgent and apparent. With some US$157m of
bank debt and another US$393m the estimated cost of a new stadium, the
club needs a financial injection to allow it to compete at the top
level of the European game. It has been noticeably falling behind
well-financed clubs like Chelsea and Manchester United in recent
years.
DIC is willing to invest around US$884m, but advisers believe there is
as yet no agreement on a central issue, which could still derail the
deal: the value put on his controlling 51% per cent stake by chairman
David Moores.
Liverpool shares are not traded on an official stock market, but the
most recent transactions have valued them at US$6485 each, valuing the
clubs share capital at around US$226m.
Moores is thought to have asked DIC for at least US$8845 a share, to
reflect a takeover premium for his stake. Dubai's DIC believes this
money would be better spent on investment in the new stadium and
players.
“It is an issue which will have to be successfully negotiated,” said a
Dubai adviser. “If he [Moores] holds out for too much he might just
negate the benefits of the deal.” Also under discussion are the other
major shareholders in the club. Businessman Steve Morgan – who has
been critical of the Moores regime in the past – has around 10%, while
broadcaster ITV has a similar stake, inherited from the old Granada
television group.
Moores’ uncompromising stand on price has been a stumbling block in
the past. George Gillett, owner of the Montreal Canadiens ice-hockey
team, proposed a similar deal to DIC’s earlier this year, only to have
it knocked back by Moores' determination to get full value for his
shares.
One possible compromise would see DIC buying a minority, but
controlling, stake and investing capital directly into the new
stadium. Moores would remain a shareholder, possibly with an honourary
position at the club.
“If he stays on it might make Liverpudlians more comfortable about the
new owners,” said one adviser. However, this arrangement is unlikely
to comfort DIC, which has a track record of seeking full control for
most of its other investments, like the Tussauds waxworks tourist
attraction and the Travelodge hotel chain.
Now why doesn't this story surprise me?
If something seems to good to be true then it probably is.
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