07 March 2008

Resolution in sight at Liverpool as Tom Hicks begins talks with DIC

Tony Evans
March 7, 2008 The Times

The tortuous bargaining over the future of Liverpool moved a step closer to resolution last night after sources close to Tom Hicks, the co-owner of the Barclays Premier League club, indicated that the Texan was in negotiations with Dubai International Capital (DIC).
Despite Hicks's repeated denials that he intends to sell his 50 per cent stake in Liverpool, his contact with DIC, the private-equity investment arm of the Dubai Government, is said to be cordial. Hicks has consistently emphasised his resistance to dealing with DIC and had maintained that he might block George Gillett Jr, his co-owner, from selling his 50 per cent share of the club to the Dubai group. The relationship between Hicks and Gillett has broken down to such an extent that the former partners barely communicate.
A complicating factor in DIC's effort to acquire Liverpool is that two sets of negotiations are taking place, with Hicks and Gillett dealing independently with PCP, the private-equity firm that is advising DIC on the deal. However, with Hicks appearing to soften his stance towards DIC, hopes were growing last night that a resolution was nearing.
A number of obstacles remain - DIC is adamant that the Americans' valuation of the club is too high - but it is thought that the deal could be structured to make it more acceptable to Liverpool's owners. DIC is not prepared to budge on its £400million bid for the club but may be willing to offer Hicks and Gillett a share of future revenues.
Such a deal would be contingent on Liverpool achieving success on and off the field and would lead to the Americans receiving a share of the profits if the club reach agreed targets. The Liverpool owners can see the club's potential but, saddled with a large debt, do not have the resources to invest in the club. Such a deal would allow them to retain an interest in Anfield while putting Liverpool under DIC's ownership.
A source close to the deal said last night that the next few days would be “critical” as DIC awaits Gillett's next move. Hicks is expected to meet Amanda Staveley, of PCP, DIC's lead negotiator, in England early next week with the Arab consortium open to the idea of Gillett selling 49 per cent of his stake to it, but the remaining 1 per cent to his partner to give the Texan a majority shareholding. DIC is still thought to be confident of acquiring total control of the club in the future.
Liverpool face a crucial period, with the Champions League first knockout round, second-leg tie against Inter Milan looming on Tuesday. Rafael Benítez's team go to the San Siro with a 2-0 lead but the match should not delay negotiations. A DIC representative was at Anfield on Wednesday night and watched the 4-0 victory over West Ham United from the Kop, where anger against the owners is growing. Many supporters spent the half-time break chanting against Hicks and Gillett and further demonstrations are planned over the coming weeks.

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