The first steps towards escape from the nightmare of the last 13 months have been taken with an announcement that George Gillett is to sell his half-share of Liverpool Football Club.
The word first started to leak out early on Friday evening, but it was extremely late in the day UK time before it was confirmed. And by confirmed, it is in fact only confirmed subject to certain conditions being met.
Dubai International Capital have agreed to buy 49% of the club, Tom Hicks buying the other 1% and with it majority control. Clauses in the original shareholder agreement are believed to have meant Hicks was able to insist on that 1% in the event George Gillett wanted to sell.
Gillett won’t be missed.
Amanda Staveley, a senior partner at PCP and representative for DIC, has been working hard on negotiations in a deal that the Dubai organisation were determined to win. She said in a statement: “Subject to renegotiation of a partnership agreement and subject to the stringent minority shareholder protection rights we would be prepared to accept a 49% shareholding in Liverpool FC. This arrangement provides the best possible solution to the situation and would be in the best interests of the club and their loyal fans.”
TheTimes report that the agreement will be finalised in Dubai next week, having been thrashed out so far between Ms Staveley and lawyers working for the American duo.
It has to be said that it’s hard to imagine a worse case than the one Liverpool have operated under in recent months, after George Gillett headed for the hills of Colorado to hide from the wrath of supporters who had finally seen him for what he was. Gillett’s absence meant the club could make no major decisions one way or the other. But Hicks is also despised by the majority of Liverpool fans, who will take a massive amount of work to be convinced that Hicks really can be a part of a successful future.
DIC wanted a review of the club from top to bottom had they taken over in full, and even at 49% they will be carrying that review out. Whether its recommendations are met is another matter, but those mentions in the statement of partnership agreements and protection rights suggest that DIC expect to still wield a certain amount of power and to be far from silent partners.
The current board is made up of two members of the Hicks family, two members of the Gillett family, and the two men who fans feel let the club fall into wrong hands, David Moores and Rick Parry. After the deal is done George and Foster Gillett will likely be replaced by Ms Staveley and possibly also DIC chairman Sameer al-Ansari. Moores and Parry know their future places on the board will now be under threat, Hicks very much believed to want Parry out and replaced by another existing senior staff member, and DIC not having forgotten how they were shabbily treated by Moores and Parry a year ago.
24 thoughts on “Gillett goes, DIC get 49%, Hicks 1% – subject to conditions”
Ok – so it’s a breakthrough. But this is clearly not the end of the matter.
Partnerships do not work. We’ve said it before about Houllier and Evans and now we’ve got the example of Hicks and Gillett to prove the point too. On top of that we already know how untrustworthy Hicks is and the ruthless business acumen of DIC. A rocky partnership for sure.
How the hell did Parry and Moores get Liverpool FC mixed-up in this international finance mess, after having so much time to find us the best deal?
So, where does this leave us? Praying! And praying harder than before!
Why, oh why, does Hicks want to stay? Money. He knows nothing about the club. He cares nothing about the club. It’s an investment (and it was never anything else). Gillett bought the spin and Hicks bought the finance. Now Mr. Public Relations has gone, we’re left with the uncertain financial position of the Texas money man in dollars at least ( and remember the US economy is very much in a downward spiral and we may even get the Republicans joining the Democrats in calling it a Recession).
What’s in it for DIC? They do not do things for childhood dreams of ‘one-day owning the club they supported as a child’. It’s money. It’s an investment. It’s the chance for a big return.
What’s in for Liverpool FC and it’s fans? For us, we’re inseparable. For the Hicks and DICs, that’s what they’re relying on to make their money. In theory this means they’ll need a winning team. In theory, yes. But all this talk about the stadium suggests we can forget winning being their sole aim. The stadium is the cash cow. We are the ones to be milked. Let’s hope these financiers give us a few more Torres and Gerrard, beyond Rafa’s Champions Leagues earnings, to make us want to turn-up.
There will be trouble ahead, no question about it. But let’s hope, we get some sort of stability, some money for even better signings and that eventually, sooner, rather than later, the American economy is such that we get Hicks out. I dislike the lying man – I still want to ‘Get him (and his family) out of our club’
I agree- there is more trouble ahead if this deal is finalised. However DIC will have a foot in the door which is a better situation than HUCKLEBERRY HICKS AND SNOOGY DOOGY! Hicks wont end up leaving until the new stadium is built, so he can maximise his profit. I hope i’m wrong and its alot sooner.
LETS KEEP UP THE PROTESTS.1 DOWN 1 TO GO!
exactly – one down, one to go.
I hate the thought of Hicks in control. The protests should continue, on some level.
Mr Hicks is not trustworthy at all. Remember when he fist denied reports that he and Mr Gillet talked to klinsmann, then weeks after they confirmed they met Klinsmann. Same goes for the bid from DIC, they once again denied, but on saturday Mr Hicks stated that their was an approach from DIC. The day Mr HICKS tell you that SANTA CLAUS DOESN’T EXIST, then guys, we must really believe that SAnta Claus EXISTS. Mr Hicks, you are a liar, and Liverpool supporters hate you. ONE MORE TO GO!
If this is the outcome what can DIC do with regard decisions in the clubs future. I don’t know much about business, how does it work if you only have 49%. Does this mean that Hicks will have the final say on everything we do from stadia to purchases.
Thanks John for your earlier reply much appreiated.
I echo the sentiments of Midlands-Red.
I will be very interested to see what this deal actually means in practice.
I will be even more interested in the financial ramifications that this deal means for the club.
Loan? No Loan? Stadium Loan? Decision Makers? So many questions need to be answered and until they are we have no idea whether this is good for the club or not.
The only thing that has changed for me is instead of singing “YOU LYING BASTARDS GET OUT OF OUR CLUB” I will sing ” YOU LYING BASTARD, GET OUT OF OUR CLUB”. Perpetually, until that Texan tosser is banished.
There may be a twist or two in this saga yet. The terms of the Partnership agreement and minority rights provisions have yet to be agreed else why the need for sessions in Dubai. The devil will reside in the detail as is usual. Maybe DIC will offer Hicks a tweaked deal when he is on their home soil.
I agree. I believe the partnership will be rocky to say the least with Hicks obviously wanting the controlling stake in the club. The fact that DIC are prepared to accept this (for now, at least) I think proves their willingness to have anything to do with Liverpool FC. They are clever, knowing that they are for the most part backed by Liverpool supporters who no longer want to see Gillett and Hicks at the helm. Since they are the only option, they know that even with their 49% stake in the club, their decisions, if in the interests of the club, the fans and the players, will be backed by the supporters…. in effect, rendering Hicks’ 51% ‘controlling’ stake only present by name. If Hicks were to go against DIC’s plans for change at the club after they conduct their top-to-bottom review, he would grow even more unpopular with Liverpool fans. He’s going to have to bend over to fans wishes to win back their support.
The argument that they are in it for the money will always remain. Most of these people are only in it for the money. Mr Abramovich at Chelsea is only in it for the money. As are AIG at Old Trafford. They just sign the cheques and let the managers get on with their jobs, which is the way the Hicks and Gillett deal was supposed to work. And DIC (with their bags of money) having a 49% stake will put them in a better position than they are now to take full control of the club because they have more support from the fans than the Hicks-Gillett partnership. It’s all about who is willing to accommodate the fans’, players’ and manager’s needs more.
According to the Independent Staveley also said:
“All parties have now reached agreement, Tom Hicks knows that in the long run we will be 100 per cent owners of the club but we are prepared to play a waiting game,” Staveley said. “We will be able to pay the price for the financing of the club and construction of a new stadium.”
The price agreed with Gillett is understood to be the one put to his advisers on Tuesday – one which will enable him to walk away with a £40m profit on his investment plus add-ons. Technically, under the terms of pre-emption rights agreement signed by Hicks and Gillett when they bought Liverpool, Hicks has three months from now to buy out Gillett. But it is understood that DIC may seek to buy out Hicks from those rights and enable an immediate deal. There seems to be a good prospect that Hicks will agree. “There is a good understanding between all parties,” Staveley said.
Martin The long term portents are obviously good. In the short/medium term you have to ask yourself if the partnership of two americans from a similar cultural and business background couldn’t work why should this new one? The club can claim world class status on two grounds only – history and fanbase. We fall short in squad quality, merchandise marketing, ticketing, executive management (and how), capacity, stadium facilities etc, etc. A root and branch review and swift implementation of recommendations is crucial just to put us on an even keel with the other three.
I fully expect a further demonstration of spending power by both ManU and Chelsea in the coming close season so fingers need to be pulled out and quick.
I believe DIC will have a strategy to remedy our plight quickly but will Hicks accommodate them?
so let me get this straight.
DIC own 49%, 2 banks own 50% and Hicks owns 1%. Hicks get to make decisions on behalf of the 2 banks, so that basically gives him 51%. DIC continue to inject their own money and reap the rewards. Hicks borrows more money and reaps the rewards. The 2 banks get their interest.
If things go belly up, DIC loses their own money, the 2 banks get their interest and Hicks walks away for free.
I am not a business man but jaysus that sounds like the kinda business i wantt to be in.
The only way I will start trusting this yank is if he personnally wipes out the other 150Million with his own money.
I have no problems with both sides borrowing for the stadium. Sell the name, like Arsenal, £50m a year the stadium will soon pay for itself. I even have aname for it
The Hicks is a DIC Stadium
This is great news, it really is. I can hardly believe it.
Is it possible that Gillett might be selling 49% to DIC but keeping the other 1% for himself? Is there anything to actually confirm he’s selling 1% to Hicks?
From what I can gather about all this, without going into details, if you were happy at the thought of DIC taking over 100% then you shouldn’t be at all despondent at this deal.
For the deal to be done, all kinds of conditions will go into the various agreements, and so DIC will not be left helplessly watching Tom Hicks doing things they’d rather he didn’t.
That leaves us asking whether Hicks would still agree to a deal if his power isn’t as strong as he expected with a 51% share – but from what I can gather he’s pretty much going to have to agree to these conditions (for various reasons), because if he doesn’t then he could find himself with less of a share (than 51%) and even less say in what happens later.
The agreements will be such that “control” will be pretty much joint.
The amount of money Gillett is set to make is sickening when you think about how it could have been spent on improving the squad.
Some interesting ideas are being thrown about over how the finance might work under the Hicks-DIC ownership.
£105m is on the club’s books, and could stay there. The other £245m is at holding company level but is guaranteed by various assets, letters of credit and cash belonging to the owners and their companies. It could therefore be moved from holding company level to (in Hicks’ case) parent company level, i.e. Hicks Sports Group, with Gillett’s half paid off. Then it’s up to the board whether or not a dividend is paid that would cover the interest amount – about £10m per year to Hicks, and £10m to DIC. DIC could keep their £10m, use it as a return on what they’d invested, or possibly keep it in the company (LFC). Not sure how the latter would effect the share distribution.
There’s also an option for all the current debt to be paid off, and for Hicks to find his own means of paying his half off (possibly with a brand new agreement, including some investment in HSG). Either way, it seems the burden of paying off that interest moves away from the club – if it can’t pay it then it won’t pay it, and players wouldn’t need to be sold.
DIC would want the stadium contracts to be drawn up in a watertight manner so that the full costs of building are known in advance, with penalties and so on to be imposed for delays, and any hit on rising costs to fall on the construction companies and so on. There’s no reason to think that would be different under Hicks-DIC. The loan can be taken out over a longer term, with different amounts released at different stages, and repayments geared in a way that sees repayments being reduced in the early years.
I’ve not got all the details, I’ve not really attempted to work out any figures, but overall my gut feeling is quite positive for this relationship. Cautiously optimistic – but we need to get more facts and figures and we’ve a lot of questions we need answered.
Jim, I very much like the way you go through the responses and provide even more background information for us to get our teeth into. You’re a first rate blogger and columnist.
It has to be said that I still, and as vehemently as before, want Hicks out.
For all the devil is in the detail of the new partnership agreement to be drawn up between Hicks and DIC, Mr. Tom will still expect to exert extra influence as the majority shareholder. Ok – DIC will be able to rein him in but this is only to a degree. (And we still don’t know what DICs intentions are, of course)
Aside from the facts and figures, does Hicks seriously believe that anyone apart from him is sufficiently happy with the new arrangement?
Further, will Hicks and his children turn up at games? And head to the pubs around the ground expecting a friendly dialogue?
Does he care that his name is and will still be mud? I suspect not particularly if the name mud doesn’t interfere with his profit.
Please understand my vitriol towards Hicks and his family is not based on ‘they’re only in it for the money’ but on that now infamous initial press conference – which seems like an eternity ago – where Hicks and Gillett told us how the traditions of LFC would be maintained. Yet look where we are now.
We all would make an extra few pounds or dollars if the opportunity arose – legally! However, Hicks took every chance to tell us it wouldn’t be a particular way only then to shove 2 fingers up to us once his feet were firmly under the table.
For that reason alone Hicks is not and will not be trusted……I await his next no-holds barred press conference with interest.
Jim If my previous post suggested that I was not happy with DIC, let me say that I would be happy if they only had the 1%.
My problem has always been and will always be Hicks. He has lied to the club, the previous owners and the fans. He is still lying.
He’s been shouting all week that he has not met DIC. He did.
He said he wasn’t in Dubai. He was.
He has the best interests of the club. he dosen’t or he would leave.
This man’s pockets aren’t deep enough to run one of the biggest clubs in the world and build a stadium. Even the Glaziers didn’t have to do both.
Isn’t it 16 Months to refinancing time? I hope the squeeze in USA puts this idiot up against the wall. I hope DIC have similar views and play the waiting game and then get the exterminators in.
As I have said before I wont be happy until DIC have 100%.
Great work Jim – Give the forum serious thought
agreed on both counts, Frosty Jack.
I won’t be happy until DIC have total control. I worry that with 51 percent, Hicks will now be near impossible to get rid off.
And agreed on the forum. This could be a helluva place with a forum.
I fully concur with Midland Red. I certainly trust Mr Al-Ansari much more than a born scumbag like Hicks. The hatred for Hicks has nothing to do with Rafa Benitez and everything to do with the financial threat that Hicks’s unworkable plans pose to the long term viability of the Club. Its an appalling indictment of Rick Parry’s judgment that after taking so long and having so much time to get the eventual sale right he still somehow managed to get is so badly wrong.
However I reiterate again my own opinion that Parry is a minor problem compared to Hicks. The mere fact that Parry and Moores’ presence on the Board means that (together with DIC’s two nominated people) Hicks is outnumbered 4-2 on the Board poses a considerable problem for Hicks. The mere fact that Hicks wants Parry and Moores out to be replaced by a Hicks lapdog like Ian Ayre is all the reason I need to want Parry and Moores to stay at least until Hicks can be gotten rid of. I hope DIC are smart enought to realize this.
I honestly believe we should continue mass protests indefinitely until we get Hicks completely out of hte Club. I don’t think the players will be unsettled by protests because they probably detest Hicks just as much as we do and would rather see things brought to a head than left to fester. Although I’m glad to see DIC on board the proposed arrangement (as reported in the papers) seems far from satisfactory in the long term.
At last!! We are half way there, DIC heard us, and that is also down to the people on the terreces making themselves heard, People like Jim Boardman and the many others who have websites getting the message out, and last but not least the people on the forums and out there on the streets…as the saying goes 1 down, 1 to go…We are Liverpool.!!!
PHILFC et al – don’t speak too soon as the link below suggests
Hicks is a business man to his core. He ain’t given up anything un`til he’s happy _ unless the credit crunch bites first.
We’ve a way to go yet – the brinkmanship continues………
i think if DIC do get in and buy that 49%, the only way that DIC and Hicks can make a start of rebuilding anything at Anfield is to go out and buy 4 or 5 top class players.After all, thats what was supposed to happen last summer and began the distrust.I think DIC are a very clever bunch as they havnt made the money they have by being dumb, in America, dumb men can make money but their overall arrogance bites them in the ass eventually.I think Tom Hicks has to come out over here with DIC and publicly say sorry for the mess he helped create. say it right in the centre circle at Anfield. wont happen i imagine but still i think he should do it. but if we have another 3 or 4 decent players like pennant kuyt benayoun come in rather than top players such as Aimar,VanDerVaart,Alves, Eto’o,David Silva per say,then DIC dont give a damn much the saem as hicks and Gillett didnt give a dman. having a nice spanking 70000 seater stadium with crap players in it while gerrard and torres duke it out in Barca Real Madrid derbies really isnt on the agenda of DIC. they have watched and seen exactly how us fans have seen the lies and broken promises, i really am confident that on the playing side, we will be seeing a Chelsea type summer in 3 months time,we will be loving the top players coming .DIC have to get it right or us fans will be even harder on them than we have been with the Americans. And remember Arabs are all about honor, they wont fuck this deal up,trust me(Im not american!)
Nothing is signed yet and Hicks has blasted Amanda Staveley’s handling of the negotiations accusing her of leaking correspondence. He is also blustering about DIC being one contender amongst others for minority holdings. As I opined above there is a tough negotiating session to go yet.
Good point John Steele………..but isn’t this all the more reason why we should continue with our protests. I hate to be blunt but a one off half time protest will have very little effect on someone like Hicks unless he believes it is merely the tip of an iceberg. The message has to be sufficiently loud and ongoing to embarrass Hicks and put any financiers or other people he might be asking to assist him in hanging onto control firmly on notice that he is on borrowed time.
Not sure what purpose will be served now as he can’t have any doubts about how most of us feel. This is a post from ICLiverpool forum with a take on it.
Posted today by ddayred
“Give peace a chance
Assuming the outcome next week is a 51/49 partnership then I, for one, am done protesting at the match. Obviously Hicks should be left in no doubt about his “popularity” should he appear at matches but I can’t see the point in an ongoing campaign.The fans can claim great credit in keeping the hostility to the Gillett/Hicks partnership going. The football world can be in no doubt about the majority of fans hatred of Hicks even if he comes out of next weeks Dubai negotiations with 51%. The battles to be fought now though are of a purely business nature. I still believe DIC want ultimate control and will have a plan to achieve it.
It will be positive day for the club once DIC get involved but I don’t see them spending if by doing so Hicks benefits by 49% so the partnership agreement is crucial. Should DIC agree to fund the club for new players etc. I am betting that will be on the basis that such loans can eventually be converted into equity diluting Hicks %age holding.
If, as the weeks and months go by. there are actions from Hicks negative to the club’s well-being I think we will be made aware of it and we will know what to do. For the moment I am relieved that the one big threat that Hicks posed – the prospect of a Leeds-type meltdown – has gone thanks to DIC.
What now for ShareLiverpoolFC? I hope this is still kept going and will put my 5 grand in when asked. Long term it has got to be the only way fans can pull back our game from the financial sector. For now DIC will do. They have convinced me that they are as interested in the acquisition of major trophies as they are in mega profits. Hicks can only see the dollar sign – the be all and end all of his every breath.
What do others think, keep up the noise or let things take their course.”
Great site. I’ve stopped looking anywhere else for information on this debacle.
I sincerely hope that the following week brings the first step on the road to removing H&G from our club. A visit to Dubai and seeing what the Emiratees have achieved over the last 50 years is something to behold. They are very well aware that their Oil revenue is going to end in a short space of time and have been diversifying to ensure that their small state will survive in the manner to which it has become accustomed long into the future. They have turned their meagre 75Km of coastline into around 1000km by building massive offshore islands, they now have the worlds tallest building, a 7 star hotel in the Burj al Arab. Nothing is done by halves or should I say 49%’s.
The Emiratees have had a couple of sorties into our football league so far, that I’m aware of. Sponsorships of Chelski and Arsenal and the Sponsorship by their National Airline of Arsenal’s spanking new stadium. Neither of these has seen them do anything but shell out vast amounts of money for no financial return. The reason. Premier league football is huge around the world, hence Mr Scudamores 39th game idea. A visit to any tv football listings sites on the web will show just how many live games are shown around the world. The point I’m trying to make is that investing in LFC will be more a way of advertising their Emirate than any hope of securing large amounts of financial gain. There is of course a price to pay. Everything associated with the club, from the new stadium, the advertising hoardings around the ground and probably even Melwood will have Dubai stamped all over it.
If LFC looks good, they look good. That’s why they are investing.
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