14 January 2008

DIC bid to buy stake in Liverpool FC aborted

Jan 14 2008
by Tony Barrett, Liverpool Echo

DIC would have bought a stake in Liverpool Football Club last autumn had they been able to agree a price with club owners Tom Hicks and George Gillett, the ECHO can today reveal.
Talks between the two parties reached an advanced stage as the Arab consortium considered buying a minority shareholding of between 10-20%.
Only a disagreement on the valuation placed on the club by its American owners stopped DIC from investing.
The ECHO understands that despite missing out on buying the club in its entirety when David Moores opted to sell his shares to Hicks and Gillett, DIC maintained an interest in Liverpool which resurfaced in October.
And when Hicks and Gillett attended the home game against Arsenal on the 28th of that month an intermediary brought the two parties together.
On the table was a minority shareholding. Initially, DIC wanted a 20% stake but Hicks and Gillett were willing to offer them no more than 10%. But a compromise of 15% was eventually reached and at that stage it looked likely that DIC would finally be able to invest in Liverpool FC.
That was until they learned that Hicks and Gillett had valued the club at £1bn, a figure which meant they would have to pay £150m if they wanted to purchase the proposed 15% stake. There was also a proviso that any such deal could only be concluded if DIC agreed to forego any voting rights.
At that point, DIC pulled out of the talks insistent that the club had been overvalued, particularly as Hicks and Gillett had purchased it for just £218.9m (including £44.8m of debt) just 10 months earlier.
The new £1bn valuation was based on what Hicks and Gillett estimated the club would be worth once the new Anfield stadium was built – a valuation which DIC felt was over the top.
The ECHO understands that if Liverpool FC was put up for sale DIC would again be willing to make an offer.
But, contrary to newspaper reports yesterday, no official offers for the club have been made and no meetings are planned between Hicks and Gillett and DIC.
Hicks told the ECHO: “The speculation in the London tabloids on Sunday morning is more rubbish.
“George and I have no interest in meeting with DIC or selling our shares to them.
“We are amazed at how silly rumours find themselves in print in the tabloids.”
Hicks and Gillett have until the end of February to complete financial restructuring, as they seek to transfer £350m of debt incurred in the purchase and running of the club onto the club itself.
It has been reported that should they fail in their efforts to repay the estimated £350m acquisition debt when it is due in six weeks time, there would be the possibility of the running of the club being taken over by the Royal Bank of Scotland, to which the debt is owed.
But sources close to Hicks insist it is only a matter of days before a financial restructuring deal is in place and plans for the long awaited new stadium are released.
If the restructuring deal is concluded later this week it is highly likely that both Hicks and Gillett will have had to use some of their own personal equity to secure the loan as the credit crunch has made borrowing money much more difficult and costly than it was just six months ago.
But until any such deal is signed, Liverpool’s fans will wonder what lies in store for their club.
A late bid by an interested party which could result in Hicks and Gillett diluting their stake in the club cannot be ruled out. But time is running out and, according to Hicks, neither of them is looking to sell, anyway.

utusanLFC :
Lately, too much story on something that is not related to football. Backroom politics... who buys who, how much it costs, overvalued... IT IS SICKENING! Now I'm starting to wonder if the Americans are really the investor we're looking for after all? They can't sort their money right, can't even to get UK's bank to lend them the money, failed to understand the nature of swift purchasing of a targeted player, making a mockery of Rafa Benitez and it could be the very reason LFC now is playing like Newscastle... tell that to Hyppia.

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