The future ownership of Liverpool FC is once again a big story in today’s media, with George Gillett on his way out according to all the reports. How much of the club each of Tom Hicks and Dubai International Capital will hold is still unclear, but certainly in the shorter term it’s unlikely that DIC will be able to complete a full takeover.
Oliver Kay’s report was the first to hit the net last night, and was the lead story on the back page of this morning’s printed editions of The Times. We’ve already discussed the article on this site (DIC granted due diligence, but Hicks still hanging on). Although The Times report was headlined “Liverpool’s American owners set to sell,” the story acknowledged that despite due diligence being given the go-ahead, Hicks was still yet to commit to selling any of his shares. It did suggest that at least a partial sale of his shares alongside a full sale of Gillett’s shares was likely, giving DIC control of the club.
In fact it must have been a busy day for Square1 Consulting, and their Square1 Sports division. They are the PR company working on DIC’s behalf to liaise with journalists, and the story has been in most of the morning’s papers in one form or other. Of course it’s not just the people from DIC who will be giving information to the press – both the Hicks and the Gillett camps have different reasons to release different versions of events to suit their own needs.
The Telegraph’s headline, online at least, has changed from “Americans on verge of selling Liverpool” to “Tom Hicks and George Gillett to sell Liverpool“, but David Bond’s report remains unchanged. And again the headline doesn’t exactly reflect the story that sits beneath.
He writes: “Liverpool’s American owners, Tom Hicks and George Gillett Jr, are understood to be just weeks from agreeing a deal with Dubai International Capital which could see the club change hands for the second time in just over a year.” And he also claims that DIC have been in talks with the two banks who gave the US duo their £350m, the source of much of the Liverpool supporters’ anger towards the owners.
Although the £350m isn’t all secured on the club, it is all likely to have to be serviced by the club, and at estimated annual interest alone of £30m per year it seems to leave Liverpool with little-to-no money for transfers. Last year, 2007, Liverpool’s net spending on transfers was around £20m, and it’s hard to see where any money for transfers could come from in future. And this finance includes only a tiny fraction of what is needed in order to build the new stadium.
Bond reports: “DIC are increasingly confident that they will… reach an agreement soon… with the two banks, Royal Bank of Scotland and Wachovia.” If the loans, set to run for a total of 18 months, are settled early, there will be penalties to pay. DIC are negotiating to reduce those penalties in a way that still satisfies the two banks before they would pay the loans off. It seems likely that in doing so their share of the company would increase: “DIC plan to dilute his (Hicks’) holding,” Bond writes, “initially by injecting further funds into the club to not only cover the new 18-month bank loan but also to help pay for the proposed new stadium and buy players. DIC want to secure a deal where Hicks sells out completely later on.”
This article talks of the takeover being in two parts, which eventually would be “worth between £400m and £450m and includes provision for the club’s increased debts.” It also, like The Times report, talks of permission for due diligence to begin soon, in this case “In the next few days.”
It’s hardly a secret that the long-absent George Gillett has decided to sell, and this report says Gillett is, “understood to have already agreed in principle to offload his 50 per cent stake.”
Hicks has denied wanting to sell his stake all along. His first denial was a little misleading, because it seemed to contradict later admissions that he’d been in talks with DIC about them buying a share of around 15% of the club late last year. But still the story remains, whether he sells part of his stake or not, he is not looking to sell the whole lot. Bond writes: “But Hicks is refusing to sell out in one go. In the short term, at least, he is expected to remain on the board.” It’s very possible that Hicks could stay as a minority shareholder without actually being liable for any of the club’s debt, or only a very small amount.
Despite becoming a minority shareholder in this scenario, Bond says that Hicks is still demanding he retains control at the club, but that DIC have “rebuffed” this demand.
Bond also reports that Hicks was in Dubai last week, which again has been widely reported. But like The Times he’s also mentioned there being talks held in London between DIC people and himself.
Hicks has been looking to buy Gillett out himself with the aid of contacts in the US. He’s got first refusal effectively, Gillett must offer Hicks the chance to buy at whatever price he’s agreed with a third party. But Bond says this proved to be out of the reach of Hicks: “Hicks has tried to raise the money to seize complete control but with the credit crunch hitting his businesses, he has failed.”
Bond also says that if successful in their bid one of DIC’s aims would be to “restore stability to a club after a period of unprecedented turbulence.”
In The Guardian, Andy Hunter’s report is very similar in content, but the headline is a little more realistic than that imposed on the stories in The Times and The Telegraph. “Hicks determined to keep his hold on Liverpool.” He quickly explains that DIC and Hicks are both confident of getting what they want, which of course can’t actually happen – one of them has to accept less than they would like. He says that DIC’s confidence in getting their hands on the full 100% of the club is based on “progress made in negotiations for the 50% owned by George Gillett.” Gillett wants out, and a quick and easy profit will see him go quickly. But DIC’s hopes that this would pressurise the Hicks camp into selling up seem to still be rather optimistic, with Hunter writing that “The Texan, however, has no intention of selling his stake in the immediate future and has, in fact, attempted to increase his family’s influence on club affairs in recent weeks.”
He also points out that the effort made by Tom Hicks Jr to speak to supporters at the Sandon shows that they are determined to try and “appease fans infuriated at the debt on the club and by the admission of an approach to Jürgen Klinsmann about the manager Rafael Benítez’s job.” Of course those who are sceptical of the Hicks desire to really stay on at the club would argue that the Sandon visit was nothing more than a publicity stunt, for the attention of DIC in an attempt to get them to cough up a little more money. But Tommy actually went for a quieter drink with certain supporters later in the evening, which was both an opportunity for those fans to voice their concerns, yet also to give the Hicks side of the story an airing off the record, along with their plans for the future. That wasn’t publicised, although the fact it happened didn’t remain a secret for long, suggesting that perhaps Tommy really does fancy a crack at winning the fans back. Hunter suggests that Benítez would probably appreciate having Hicks’ son around at Melwood, given Rafa’s acceptance that Hicks really does now support him despite their past fall-outs. Gillett’s son Foster was hardly a great deal of use when he was in Liverpool, and having disappeared some time ago is of no use at all now, but Tommy could “fill the void” says Hunter. Hunter adds a little more weight to the owners’ perceived attempts to show more commitment, saying, “Another of Hicks’ siblings, Mack, was present for last week’s Champions League victory over Internazionale and the Liverpool co-chairman is believed to be prepared to give a speech about investing in the city at a property and regeneration conference in Cannes next month.”
Meanwhile if Tommy does fancy a few pints after a game, or after a busy day of meetings at Anfield, he’s been told he’s still welcome at The Sandon. At least that’s what the pub’s general manager, David Gaul, has said. Gaul has looked back at CCTV footage of Tommy’s short visit, and with the claims of violence reported in some quarters has offered the footage to the police if they want to come and collect it. They’ve not asked for it so far, and according to Mr Gaul there wasn’t exactly very much to see, and the singing can’t be heard anyway: “Mr Hicks was having a drink at the bar and some fans started talking to him. As far as I can see from the footage, which of course does not have any sound, there was no animosity at all and he didn’t leave in a hurry. Any of the Hicks or Gillett family are welcome to come in to the Sandon and enjoy a drink with all the fans.”
Gillett is certainly not likely to take that offer up, having gone from wanting to sit on the Kop with the fans to wanting to be as far away as possible. But for now at least, it seems that DIC’s valuation of the club isn’t high enough for Hicks to sell up completely, and that’s before they inspect the books.
10 thoughts on “Hicks and DIC partnership remains most likely outcome for Reds”
once again this is yet another very informative article.
Hicks staying involved might enable completion of the existing stadium project. let’s hope we don’t have to back to square 1 on that.
Just what is really going on?!
Widespread reports of due dilligence, then Hicks issuing a complete denial to the contrary.
I’d love to know exactly what on earth is going on!
is anybody sick and tired of the cloak and dagger farce our club has become?we might be in the UEFA Cup next season and hal f our team buggered off for “footballing reasons”,funny the reasons they would be is that they wernt good enough to qauify through theleague. at the end of the day, our club is being riduculed on the pitch,in the boardroom, around the training grounds of prem clubs and on the terraces. not to mention spurs fans even having a dig. what a joke we have become
Martin – Hicks says, to paraphrase, “I haven’t invited DIC to look at the books”. But if Gillett is selling his share, that’s enough for the due diligence to go ahead. Gillett can give them permission based on an indication of an offer for his half. So Hicks doesn’t have to invite DIC, and so in turn this part of the denial means little.
If Gillett also came out of his cupboard and denied it, or the club issued an offical statement denying it, then we’d have to accept the due diligence wasn’t going to happen. I can’t see either Gillett or the club denying it though.
Thanks Jim. Thats a well informed point. Should really have thought that one out for myself. I guess like many fans my hopes are raised when articles like those in ‘The Times’ come out, only for Hicks to reiterate his stance a few hours later. As you pointed out in your preceeding article there is unlikely to be an absolute resolution to the takeover situation, and a compromise may, initially at least, have to be realised. We can all hope though, eh?!
Jim keep up the great work. A few points though.
1. DIC’s major concern with the transaction has always been how estbalshing a deep relationship with one club could actually sully the brand of Dubai with supporters of all the other teams
2. In the aborted takeover in 2007 DIC were quite cateogrical in resisting the overtures of another party about doing ajoint deal. Their position was that they were only interested in going it alone.
This site is by far the best out there. You guys should wrtie for the echo!(maybe you do and i’m being dumb?)
Hicks is going to wait until his investment has matured. He is a fat cat and he knows what he wants from all this. He plays hard ball and is unlikely to be put off by a few protests and some vitriol against him and his family. He’s used to adversity and he’s used to having to fight against the majority(of fans).
He need only hang in there till the new stadium is built and will then make a very tidy profit from LFC. As he is well aware, once that is built, the club, with increased revenues(as long as the team doesn’t falter too badly)will be worth more than double what it is now.
It is said that he believes the fans loyalty to the club does not vary dependent on success on the field, however, whilst that may be true for the real fans, the crayfish sandwhich brigade(some of whom are needed to fill the new stadium) will not be so keen to come to games if we are fighting it out with villa and everton every year.
Perhaps Hicks realises that he can still make a tidy profit, whilst not having to fund/risk anythign further, by selling a certain amount of the club to DIC. This would also ensure that the squad continued to advance and catch up the top 3(if it is at all anyway).
One thing is for sure, Rafa’s dynasty is a work in progress, one which is attempting to rebuild after years of failure, both on and off the pitch. If his time is cut short now, it will only mean going back to the drawing board for a new man, perhaps moroniho aside.
We need stability, we need commitment to one man and his plan. I believe that man is Rafa and whoever comes in, should realise that there is no quick fix. If they care at all….which, by the sounds of things, the only thing any of them are interested in is profit.
Do any fat cats really care? can the love of a football team ever come ahead of money? Obviously it can for local people and life long fans..but none of these people are that..and never will be.
I have no idea how this mess will end, and it feels like there is no straightforward answer to that, especially one which encompasses everyones needs and hopes, from the manager to the fans.
Nice article Jim. It appears to me that Hicks quite enjoys being at the centre of all the current attention and (being the born hustler that he clearly is) probably senses that DIC’s involvement in the Club may yield him a bigger long term profit if he stays in than if he sells. It is absolutely clear that Hicks has no intention (and never did) of investing any of his own money in either squad development or the stadium regardless of what he said when he first bought the club. However he is under no legal obligation to sell and clearly believes that if he retains his own shares he can leave DIC to do all the heavy lifting (in terms of investment) and yet collect an equal share of all the income that may accrue from this in the longer term. The prospect of having a bloodsucking leech like Hicks as a partner who expects a cut of everything without doing anything in return must be a serious disincentive for DIC to get involved. In every respect he is the worst nightmare for any true Liverpool fan .
You make an excellent point about Hicks fundamentally disrespecting the fans by continually trying to bullshit and mislead them with spin and carefully chosen (but highly misleading) words on every issue. Jimmy Melia is a kind, decent man and no doubt has LFC’s best interests at heart but he is being used like a chump by Hicks without even realising it. When will people like Melia, Moores & Co realise that, for a predator like Hicks, lying and bullshit come as naturally as breathing. The one thing we should all know by now is that nothing this man says should ever be taken at face value. It seems clear also that recent rumours to the effect that Hicks wants to replace Moores and Parry on the board and give more power to his own people (ie. Ian Ayre and Tom Hicks Jnr) are being borne out by events.
having read all the above coments , i must agree with them on the matter of the mess ,messers gilet&hics have put our club in , and i would just like them to ,as we say do one as quick as pos, i have suported liverpool since i was of an age to get into the old boys pen and remember the dignity of the owners in those days , and i find it verry unnerving the way those to planks have draged the name of our club through the ,media quagmire just to make a few more dollers ,so please messers hicks&gilet bugger of and leave us alone you are just a couple of yankee jokers ,so go back to where you belong
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