RBS ready to call time on Hicks and Gillett

George Gillett and Tom Hicks were given the clearest sign yet that the Royal Bank of Scotland has run out patience with them after the bank moved their debts to its Global Restructuring Group.

Gillett Hicks RBSWith less than a month to go until the deadline for the massive debt to be refinanced or paid off the decision is seen as evidence that from RBS’s point of view refinance is not an option. The club’s current owners need to find hundreds of millions of pounds in less than four weeks or they face losing the club.

It was also claimed tonight that RBS CEO Stephen Hester was personally overseeing the high-profile account.

The RBS website describes the unit as playing “an important part in managing major corporate clients across the globe who find themselves in financial distress.”

Liverpool fans have been in agreement for some time that their club is in financial distress, now RBS are reported to have made this official. The restructuring group also has responsibility for “the management of any problem lending portfolios” and “returning those accounts to the originating Group Business Unit / Subsidiary in a satisfactory condition.”

With the group also responsible for “maximising debt recoveries” and “obtaining levels of reward proportionate with risks undertaken” (and that means reward for the bank, not the current owners) it seems more unlikely that Hicks and Gillett will still be Liverpool owners by the time next month’s Goodison derby kicks off.

The Telegraph reported tonight that the debt was shifted to the restructuring group back in March, but whatever the timing of the move it’s clear that RBS have taken a dim view of Hicks and Gillett’s conduct and that their patience is close to running out.

In fact the bank’s patience was already extremely thin in March when – according to parent company accounts – they were only willing to grant Hicks and Gillett an extension of 16 days for the debt. This would later be extended long enough for the enforced appointment of Martin Broughton as chairman to go ahead in April.

Broughton’s appointment was made in order to facilitate a sales process, Hicks and Gillett standing down as joint chairmen and Broughton talking about an approximate deadline of the end of August to see a sale go through. That deadline wasn’t met.

The sale process, described by Broughton as a “willing buyer, willing seller auction”, has hit problems along the way.

In June the new board reportedly blocked an attempt to refinance the debt, an attempt by the owners to bypass the sales process and prolong the club’s problems.

Then George Gillett was reported to have tried stalling the process in July by informing RBS he had a buyer lined up. The buyer just needed a little more time to get his bid together, a bid that would pay off the debt and see the new stadium built.

That bidder turned out to be Yahya Kirdi, a former off-licence and pizza-store owner with no evidence of having any links to the high-powered and wealthy Middle East businessmen who were supposed to be backing his bid.

The reported claims from Gillett came at a time when interest from a consortium fronted by Kenny Huang was about to hit the headlines.

The Chinese consortium he was acting for was later reported to have made a bid for the club in time for a deadline set by Broughton, a bid that was strongly believed to have been the only one made, despite claims from the club’s MD Christian Purslow that suggested there had been more. “A number of bids” can of course mean just one.

Huang made an announcement soon after that he was withdrawing from the process, amidst claims that he had run out of patience with the club’s board and felt they had not been taken the bid seriously. This coincided with some determined efforts to try and discredit Huang, designed to try and prove he’d been no more serious than Kirdi the Pizza man.

Huang had never been billed as the man with the money – although bank sources confirmed prior to his withdrawal that he had proved the money was in place. And regardless of how serious his bid really was, it was no longer on the table anyway.

Assumptions were made that he mustn’t have been serious in the first place – and it almost went unnoticed that the club had very suddenly stopped talking about the sales process and the claimed “number” of other bids.

With the October deadline moving ever closer it seems increasingly likely that the nearest the club had to a serious bid was also the only bid.

When the owners finally refinanced their initial loan in January 2008 they also amended the articles of association of both Kop Football and Kop Football (Holdings). Those amendments give RBS the power to take the shares of one or both owners should any debt secured on those shares be called in.

RBS are believed to be looking for the club to be sold ahead of the deadline rather than them taking control of it. However the bank taking control of the club – at least in the short term – is still considered to be a preferred option to putting the club into administration. Administration would see the club deducted nine points but still can’t be ruled out.

Bloomberg said sources close to the deal had told them that RBS were now willing to accept a down payment of as low as £100m “with an agreement to pay the remainder of the loan down over a longer term”.

They also quoted Stephen Schechter, CEO of Schechter and Co, who gave them his opinion on how the situation at the club may unfold: “The roulette wheel stops spinning on October 6,” he said.

“If you were a prospective buyer, I would call RBS and say I’m interested in buying your loan. I would notify Gillett and Hicks that I’m the new lender and there will be no extensions, renewal or modifications of the loan: It is due and payable in full on October 6.

“What that does is stop the game.”

What Liverpool fans are now concerned about is what happens when that game stops.

It’s far too early to celebrate the end of the bad times.

There is always a fear that Gillett and Hicks – veterans of situations like this – will have more stunts to pull. And even if they have run out of tricks the club will still need a buyer. Without one administration is inevitable.

Should a buyer be found, be it a buyer of the RBS debt or a buyer of the club, there no longer seems to be a requirement that they invest in the proposed new stadium or indeed in the playing squad. Previous assurances that the “right buyer” will be found look like being replaced by efforts to find any buyer.

37 thoughts on “RBS ready to call time on Hicks and Gillett”

  1. Hi Jim,

    Good article and I was quite optimistic until your last paragraph. How likely is it that RBS would sell to anyone who can pay off the debt but has no other interest except owning a prestigious club and then proceeds to repeat the actions of H&G (and the Glazers) by using it as a cash cow to fund their other interests?

    Surely RBS would want the LFC board to be involved in the sale and the conditions that money be made available for a new stadium and players would have to be part of the deal?

  2. @ Ray

    Stephen Hester’s involvement suggests that RBS will want to be seen to do the right thing and sell to the right buyer. But we can’t be sold to the “right buyer” unless that buyer actually makes a bid. Very little interest (so far) suggests that may still prove to be a problem.

    I’m still cautiously optimistic.

  3. Its scary to think that LFC have even come this close to administration. I know that prospect is still some way off but still far closer than I ever thought a club like Liverpool would come. Unless a saviors found we risk following Leeds footsteps.

    As you mention in your final paragraphs I think its inevitable that Hicks and Gillett make some kind of delaying ploy or launch some sort of legal battle to prevent a bank takeover or a cut price sale.

    As Ray points out it is also very worrying that if the bank does take over the sale process the chances of investors without the backing we need entering the fray, eyeing the opportunity of bidding for a cut price LFC

    I said it when Kenny Huang appeared on the scene and I say it again, this story has got legs to run along way yet..

  4. I dont know..logic tells me that there’s no serious buyers out there. LFC is one of the biggest and most successful clubs in the world..you’d think they’d have been lining up to buy it during the summer! Instead there was nothing apart from Huang. They’re probably turned off with all the debt. To be realistic, what we’re looking for is someone to spend close to a billion pounds on the club – from clearing the debts, to purchasing the club, to starting work on the new stadium and investing in the team..is that possible? Are we going to have to settle for different owners but same situation?
    Usually i like to think of myself as an optimist, but im seriously grim about the club at the moment. I just cant see how we’re going to get that stadium built. Whatever about having 20/30 million to spend on new players; thats all short term. What we really need is that stadium built..its absolutely critical to our future ..and I just cant see it happening anytime soon

  5. Christian Purslow, Martin Broughton, et al has lied to us. There were no other bidders. They should be condemned along with Hicks and Gillete.

  6. Thanks for the article Jim. Your well written articles always make great reading.

    It was rumoured that Huang withdrew his bid when he heard that there were no other credible bids. Even if it meant his consortium missed the summer transfer window they would be able to buy LFC for maybe £100m less in October. Even with the wealthiest backers in the world that has to sound tempting. A Club like LFC should always be a long term investment and if they indeed are interested in LFC as one, one missed transfer window is not that big a deal.

    I won’t be celebrating a minute before it’s official and 100 % certain that the parasites have been forced out but it is a possibility that come January transfer window, Snoogy Doogy will be paraded at Anfield.

  7. Michael, your missing the point slightly. Any new owner isn’t coming in and paying off the debt and then buying the club.
    Any new owner who pays off the debt is then the owner. They could pick up the club for, depending on what source you read, anything from 237m to 260m. This is a bargain. The club is realistically worth around 400m.
    Off the top of my head, say Richard Branson came in and built the stadium and renamed it the Virgin Stadium he would have a massive advert for his company. He wouldn’t have to spend so much everywhere else so it would be a great move for him.
    Not that he’s ever show any interest in buying a football club mind.
    I think as D day approaches, we’ll see lots of activity.

  8. Think we are in the end game here people, if the owners fail to make the deadline then I don’t think that the yanks will have much chance of stopping them.

    From my very limited knowledge of such things, providing the creditor has been reasonable in so much as giving the debtors reasonable time to repay the money owed then they are well within their rights to get the money owed to them.

    From what I can gather the fact that the banks have extended the refincing deal for another 6 months without taking another penny then they will now be within their rights to seize control of the club to recoup their money. Unless the yanks use their own money to pay off the debts then I can’t see them being able to stop them.

    I think people are also forgetting a couple of things about why there doesn’t appear to be any other bidders, and they are:

    * We are still in tough time financially, the global economy is still struggling, and as we all know football clubs are things of luxury not serious financial investments.

    * Maybe would be suitors are waiting until the bank takes over then they will get the club much cheaper.

  9. Jim,

    It’s reassuring that Hester is involved. Assuming the debt is circa £250M that is a very reasonable price for the club. How much did Man City change hands for? Not much different I suspect and of the two clubs which would you rather own?

    If I was a potential buyer I’d feel far happier buying the club from RBS than rewarding two individuals who haven’t invested any of their own money in the club for over 3 years.

    Regarding the comment from Mr F there’s still plenty of money out there. The Middle East, India and China are relatively untouched by the recession. I’m also cautiously optimistic things will work out.

  10. Ray, Man City already have a splendid new stadium, which was built for the Commonwealth Games a few years ago. Liverpool have been suffering with a decrepit and low capacity stadium because Moores & Co sat around doing nothing, while their rivals worked on building bigger, modern stadiums.

    Anyone looking to buy Liverpool, even at a low figure of £250m, will still have to find another £300m to build the stadium. In the current financial climate, that’s pretty much a non-starter. Seeing as the club is losing money daily on interest payments, there’s zero change it’ll be able to cover even higher debt.

    All in all, Liverpool FC will whither away like great clubs of old, unless someone very rich and not needing massive loans to build the stadium comes in soon. This isn’t all down to H&G, the global recession prevented them from getting money, this goes back to the mid 90s.

  11. Paul, Eastlands capacity is 47,726 compared to Anfield’s 45,362. That a difference of less than 2,400. Hardly a factor when it comes to gate attendances. I grant you Eastlands is more modern but gate receipts won’t be much different.

    I do get tired of criticism of David Moores. He did a good job for the club for many years and simply couldn’t afford to fund us to the next level. At that point he did the only thing available to him. I’m not going to get into the rights and wrongs of his decision except to say how many of us signalled the alarm bells when H&G appeared as buyers? Not me and probably not you.

    £300M is not a huge amount of money to the mega-rich. Sheikh Mansour has spent £100M on players in two years and £500M in total. There are other rich people out there. They’re just biding their time.

    There won;t be any interest payments once a buyer has been found. The amount the bank sell it for will clear all the debts. At that point LFC could stay at Anfield and income from Sky, sponsors, gate receipts and the shop will be sufficient for a reasonable player budget each season. A new stadium will help generate more money but the cost of that has to be offset.

    The club will not wither away as you suggest and I do get annoyed when so-called supporters say these things. Despite 3 years of nil investment from H&G we have not withered away and with a decent manager and good scouts good players can be found.

    Having an expensive squad is no guarantee of success. Look at Spurs and City’s results 2 weeks ago. They both lost to lesser teams and for all the money Abramovich has spent at Chelsea he still hasn’t won the Champions League.

  12. Jim,

    Is it probable that there will be no activity in the LFC boardroom until 6th October? It seems to me that everyone who might be considering buying the club are just waiting and H&G are resigned to their fate.

    Or do you think H&G are plotting something totally outrageous to retain control? And to what purpose? Why retain control over a club where no-one (from fellow board members to the fans) have no respect for you?

  13. @ Ray

    I asked a similar thing a while back (buyers waiting til October). It seems as if there are no credible bidders out there since Huang and Pizza man have fallen off the pace.

    I guess we’ll just have to wait and see…

    Very cautious optimism.

  14. @ Ray

    I’m sure H&G are plotting constantly to find ways of “winning” this war. They refinanced with RBS in January 2008 – 12 months with the option for a further 6. They took that option up and it saw them through until summer 2009.

    That would be the last of the long-term extensions for them. But not the last time they’ve had an extension to a deadline, not the last time where they seem to have failed to keep to the arrangement they’ve made but have been able to negotiate more time by making some concessions.

    The summer 2009 refinancing was done after they agreed to put more “equity” in – although this was done as inter-company loans.

    Around the same time as this happeneed they brought Christian Purslow in – presumably to show RBS that they were seriously looking for 3rd-party investment to lower the debt still further. He failed to find anyone (whatever the reasons) and by March of this years RBS had got to a stage where they actually authorised an extension of as little as 16 days.

    The way to extend that a bit further was to step down as chairmen and appoint Martin Broughton and BarCap. But Broughton’s loose deadline of August 31st passed without success, five weeks before the new finance deadline.

    So with just a few more weeks left we all assume that this is it for them. But they’ve found ways of extending their deadlines in the past, and we can’t rule out that they’ll find a way again.

    Don’t be surprised if another Yahya Kirdi appears again as the deadline looms, giving them another few weeks to string RBS along. But will RBS be strung along again? Hard to say really.

    Why would they want to retain a club where nobody has respect for them? That “M” word of course. They don’t care about getting respect as much as they care about getting money. If they did they’d have gone a long time ago, when they had credible offers far better than anything they’ll get today.

    At the moment they’re in danger of not only missing out on a profit but maybe even losing some money. They’ll cling on for dear life – and my worry is that they’d rather lose that money fighting (whatever harm it does to the club) than go away quietly, accepting this was one war they couldn’t win. If they’re going down they don’t see why we shouldn’t go down with them.

    @ Jeff

    In my view it would make little sense for multiple buyers to sit waiting in the wings to see what happens in October unless they knew that was their only hope of getting enough money together. As one buyer sits there waiting for H&G to become desperate the other buyer might just be sitting there thinking he’ll cough up a bit more now and leave the other buyer standing.

    If there’s only one serious bidder of course this changes all that. As soon as it became clear the deadline for the transfer window was going to be missed – and if there was no competition from other bidders – there was no longer a need to rush into a purchase.

    I don’t think Kirdi and his bid was credible at all. I wouldn’t write off the Huang bid just yet, all the attempts to discredit him or find dirt on him don’t get us away from the fact that his bid was coming not from his own pocket. I understand the question marks though.

  15. Jim

    Agreed, although I’d suggest that in today’s climate, there may not be that little bit more to cough up! 😉

    Also, there’s a, quite frankly, ridiculous chasm between what H & G want for the club and what we’re realistically worth. no-one is going to pay £600m so perhaps they’ve got the money together for a sensible punt, say £300m, rather than trying to scrape together the sums the owners are asking for?

    I wouldn’t put it past folk who have been discouraged in the past (maybe DIC) to be waiting in the wings.
    Perhaps Mr Huang has been told to go via the proper channels and not share his plans with the media? He did say that he won’t be coming back but I reckon that’s just smoke and mirrors…after all, if there is at least one bid on the table, none of us have any idea who they are!

    How serious a threat is this docking of 9 points? I read somewhere this morning that if the bank takes control, it’s unlikely to happen…still worrying nonetheless…

  16. Jim,

    Thanks for a comprehensive reply. Do these “inter-company” loans mean more debt is loaded on the club or is it outside of LFC?

    Regarding money, surely they can’t be making that much from the club and the more they let it run down the less it will be worth. This is what I find so puzzling. In their first year they presumably gave Rafa some money to buy Torres (plus others) so why not just give a sensible amount each year and see your investment grow? But a check of these guys financial history with chaos left whever they’ve been involved tells me they’re not cut out as good owners (to put it mildly).

    I hope they bow out quietly and we get an owner the club deserves. How can anyone not see the investment potential once the club is free of debt? The world is their oyster.

    Fingers remain firmly crossed.

  17. @Ray.

    The inter company loans are how they are maing money on LFC. Kop holding loans LFC money via an intercompany loan, and then they charge interest on that loan and that is how they make money. They also charge LFC for running the club and for making financial decisions in much the same way a hedge fund boss would. The difference between a hedge fund boss and a CEO is the amount of money they charge, hedge fund bosses charge something like 10% if not more of profits as their costs.

    That is how these 2 are bleeding the club dry.

  18. Thanks for that Mr F. That was what concerned me. These two vile individuals have put little or none of their own money into the club and continue to bleed it.

    A curse on all their houses!!

  19. @ Jeff

    Huang didn’t say he wasn’t coming back; he said: “I am now considering my future options and will be making no further comment at this time.”

    A lot has been made of Huang’s use of the media but if you go back and look at how much he used it there was never really a sustained period where he was speaking on or off the record.

    He’s been compared to the likes of the Saudi Prince who got his photo taken with Gillett and now has it plastered all over his website, or Kirdi who was quite clearly not what he said he was – and also went out of his way to have photos taken with Gillett (and Hicks).

    I can see why Huang might raise similar suspicions but the effort that has gone into this (not to mention money, with at least 3 PR agencies involved, not to mention lawyers and other advisors) suggests that this was not a sensible way of getting publicity to raise his profile. Only time will tell for sure of course.

    He’d spent many months in the background before the first revelations that there was even anyone serious waiting to approach the club with a possible bid. One Saturday night we got given the green light on this site to mention (without a name) that someone was ready and waiting to make a move, alongside the suggestion that Yahya Kirdi’s name was being used by George Gillett as a means of stalling the process. The following night The Times revealed Huang’s name as the person looking to make a move for the club.

    After that the statements from him, or on his behalf, were few and far between. The story was kept alive by information coming from others, including bank sources, club sources, pizza sources and so on.

    The time of his arrival being announced (via the Times) to his departure being announced (via his own statement) was less than three weeks. The initial impact made Broughton sit up and take notice (and speak over the phone to the press about it) – and it made it clear Huang’s bid was willing to pay a premium to get control before the transfer window closed.

    The club (through a statement and through Purslow talking on radio) had tried to give an impression that numerous bids had been submitted. There has been no further statement from the club or Purslow since they said they were looking at all those bids. And nothing on or off the record to suggest that there really were any other bids. The feeling was that Huang’s bid was the only serious bid (or, for the sceptics, the nearest there was to a serious bid).

    Huang’s departure from the process came when it was fairly clear there were no other bids, but also when it was clear there would be no completion before the end of August.

    Once the chance of being able to get involved in the transfer window had passed, and when it had become apparent that there was no competition in terms of other bids, there was little need to hurry for the sake of around five more weeks.

    If Huang hasn’t given up (or isn’t the chancer some people think he was) the chances are he’ll still put the highest bid in when it comes down to a more panicky auction as that deadline looms closer.

    I think the worry about the 9 points is something for later. If RBS do take the club off the owners they’ll become the new owners of the club. In return for losing the money owed to them they get a football club worth around the same amount of money as what they are owed. They can then sell the club off in order to get back what they were owed. As that new sales process goes on the club can continue to run itself, pay its bills, tick over.

    They don’t want to own the club forever, their restructuring team will no doubt have a plan that covers how long they would run it for and how much they would be prepared to lose on the whole deal (if anything). I just don’t see how RBS can really put their foot down about what type of owner comes in, unless they intend to be the club’s bankers into the future, in which case of course it is more of a concern to them.

    At the moment the club manages to pay its bills. We can’t compete for transfers but we can pay our bills. We don’t like the way we get the money in, but it comes in and covers the costs.

    If the club finds itself in a position where it can’t pay all its bills the bank will then have to put the club into formal administration where someone independent makes the decisions about who gets paid first, where it strikes deals to defer payments or reduce what’s owing. At that point we’d lose 9 points.

  20. Ray,

    Some of the debt is on LFC, some of it is on one or other of the Kop Football and Kop Football (Holdings) companies. It’s borrowed at 10% interest, but none of this interest had been paid last time any official update was made about it. It’s payable on demand, but not if it would make the club/company insolvent. I’m not sure how hard H&G could come after new owners to get that money back.

    To be fair (not sure why) to H&G the profits on transfer windows only really began when Purslow arrived at the club. Keane was sold back too late in the January 2009 window (it was actually February by then) for the money to get reinvested. By the time the summer window opened Purslow had arrived and we didn’t see that money reinvested, nor did we see anything added to the budget for the summer itself (we made a nominal profit on summer trading). We made another profit in January 2010 and again in summer 2010.

    Whatever it was that brought Purslow here, be it bank demands or some other reason, his arrival has coincided with serious scaling back of transfer spending.

    Maybe the owners demanded that, maybe the banks did, either way it won’t change until the club is owned by people who are less reliant on finance from the bank.

    The reason the owners won’t go so easily is that they see the investment potential too – they want a piece of it. They can’t put the money in, but expect to get some of that money out. As time goes on the decision is moving further and further away from being their decision to make.

  21. Mr F,

    H&G were told they had to put money into the club. The first time was in January 2008, they had to put much more in 18 months later. By putting it in as cash they’d only get their money back if the club was sold for that much on top of what was owed to RBS.

    Say they’d put £100m in and RBS were owed £300m too. If the club was sold for £300m they’d get nothing out of the deal, in fact they’d lose £100m. If the club was sold for £500m they’d have £200m back from what was a £100m investment from them.

    If RBS forced them to sell for less than £400m they’d lose out and would have no way of getting any of their missing £100m back again.

    By “lending” the money to the club it makes it different. Not only do they get 10% interest (probably offset by what it’s costing them to borrow money from other sources if that’s how they found it in the first place) but they get a bit of a hold on the club.

    RBS could still sell the club for less than £400m, but the new buyer would inherit that “debt” owed to the existing owners. If the club went for £350m then the new owners would effectively owe H&G £50m.

    They can charge the club for their “advice” but at the moment, with no family members actively taking part in the day-to-day running of the club, it’s going to be harder for them to justify that.

  22. Jim whether Huang spent many months in the background or not he still walked away from Liverpool (permanently or not) without making an offer for the club.

    I think its too easy to discredit one bidder over another when there is very little information to actually go on regarding any of them or how serious they actually are.

    With respect of Huang he burst on to the scene got weeks of media coverage and disappeared into the night again.

    Whether he is planning a new bid for the club remains to be seen, personally I dont think he will. Where he lost credibility for me was the mention of having the backing of the Chinese state, a sovereign fund worth billions. You cant dangle a carrot like that in front of the fans and then take it away again.

    So for me he is no less of a red herring than Yahya Kirdi. We can blame the board but the fact remains he didnt make a bid or at least one that was deemed acceptable. Beware of false prophets and all that.

    Personally I suspect we will be taken over by somebody who has been waiting in the wings without the media fanfare. Maybe Keith Harris represents a genuine consortium maybe he doesnt but like Harris said I dont think we will know who has taken us over until it happens but I’d bet on Sheik Mohammed before I would Kenny Huang.

    Lets just hope it doesn’t come to administrations and a 9 point deduction. I wouldnt be surprised to see a consortium stealing a march on their rivals by bidding for the club in the coming weeks before the October 6th deadline falls due. That would potentially shock some of those playing the waiting game into action.

  23. Jim,

    We will presumably see the state of the finances when the accounts are published as they are legally obliged to do I think. I am concerned about the amount the club owes.

    It seems strange CP would not allow a decent transfer kitty to the manager unless he had lost faith in his ability to spend the money wisely. Perhaps £19M for Johnson and about the same for Aquilani convinced them Rafa wasn’t very good in this area. And perhaps the jury is out on RH. January might give us a clue there.

    H&G must be living on a different planet to the rest of us when they expect to reap rewards from an ‘investment’ that they have singularly failed to invest in!

    Jim, one other question regarding ownership. You mentioned some months ago that a credible offer had been made for the club but wasn’t accepted. Do you know the source of that bid and are you aware if they are still interested come October? They would appear to be our best bet unless you know different.

  24. Juan,

    You say Huang walked away “without making an offer for the club” – what exactly constitutes an offer? Later in your post you say “the fact remains he didn’t make a bid or at least one that was deemed acceptable”.

    The term used by the club itself the last time it discussed the process was “bid”, and it was “proposed bid” rather than offer. That was on August 14th, after a deadline had passed for potential bidders to put their proposals before the club.


    “The Liverpool FC Board has reviewed a number of proposed bids for the club at a meeting held today.”

    Obviously “a number” could actually mean “one”. If Huang didn’t put a proposal before the board, who did? There hasn’t been a word from the club on the sale process since Huang said he was “withdrawing from the ongoing sales process”.

    And Huang did put a proposed bid before the board, but you’ll have to take my word on that for now because I can’t offer you anything more than that right now.

    As for you saying “one that was acceptable” – do we know what the board would deem “acceptable”?

    Three “entities” have an interest in the terms of the bid. The owners – who want their money back plus profit. The bank – who want their money back plus maybe even some ongoing future business. The club – who want the debts removed, money for a new stadium and the means to invest in the playing squad.

    To satisfy all three of those entities will require a bid something like the one Tom Hicks claimed he’d get. There’s no chance of that. We were told there was no minimum price – is that true?

    Who dangled the carrot of the sovereign wealth fund? Who took it away?

    If Keith Harris represents a genuine consortium, but believes a genuine bidder wouldn’t go public, why has he gone public?

    I’m sure we will get others coming out of the woodwork in the coming weeks claiming to have a bid ready for the club. Some of them will be publicity seekers like the Saudi “prince”, others will be stalking horses put there (or given undue credibility) in an attempt to drive up the price. Maybe there will be someone genuinely interested in buying the club, but unless word gets out that a previously laughable bid could win I can’t see anyone new coming in out of nowhere. Maybe, as remote as it seems, RBS will give the owners more time (in return for even more arrangement fees).

    Undoubtedly there’ll be dirty tricks put to use by most if not all of those involved.

    We’re talking about hundreds of millions of pounds, nobody’s going to just give that kind of money away, whether it’s potential new owners, bankers, or the existing owners.

    All of them will make use of the media as they see fit.

  25. Ray,

    The finances don’t need to be published again now until next May. That’s the figures up to and including July 31st 2010. The last lot of figures only went up to 31/7/2009 and only mentioned Alonso’s sale as having happened “post balance sheet”. Nothing at that time to suggest money was being held back – it just wasn’t there thanks to the interest and other finance charges.

    Not the time to go into the quality or otherwise of Benitez’s signings or sales, but there has been a suggestion for some time that something changed over the course of summer 2009 in terms of transfer budgets. Most of what is suggested comes from information off the record and falls into that “who do I believe” category.

    Johnson cost £17.5m (before 31/7/09) and Aquilani cost £17.1m (after that date). Johnson was part-paid by offsetting his fee against money owed to us for Crouch and the loan of Pennant. Money we might have feared we’d not see again (it was some time later that the Premier League announced they’d withhold TV money from Pompey unless they paid up what they owed to other clubs for transfers).

    When Benitez spoke after signing Johnson he said there was still money available for signings without having to sell anyone. So when we sold Alonso for £30m nobody expected us to only have £2m left to spend (on Soto) after spending £17.1m on Aquilani. We had around £10m left from trading so far that summer, Benitez said we also had money left to spend regardless of sales. Was Benitez lying, adding his figures up wrong, misled or did something just change?

    We’d also got £16m back for Keane in the February without spending any of it. We brought a fair bit more money back on the sales of Dossena and Voronin in January of this year. We made a profit on sales this summer – after the club had been briefing about a transfer kitty of between £12m and £15m for the summer (on top of sales).

    It’s not got anything to do with trust in RH or RB. The new “player account” (as CP terms it) seems to include all player-related costs including wages, and sales of players seem to be needed in order to cover all those costs.

    Regarding the other credible offer, I think you might mean when I’ve referred to a credible offer, or proposal, to provide funding for the new stadium. I can’t really say anything more than I’ve said previously, namely that an approach was made, it seemed to be taken favourably by one of the owners who referred it to a member of the board who deals with the day-to-day running of the club. At that point it was completely ignored.

    It was credible offer – but not an offer for the club. No explanation was ever given for it being ignored. It wasn’t looked at and then dismissed, it was just dismissed. If Purslow was looking for £100m of investment at that time why didn’t he at least speak to this person? Someone claiming to be in a position to provide £300m – £400m of funding for a stadium is completely ignored when you’re looking for £100m of investment? Why?

    I’m sure more will come out about all that in time.

  26. Mr F

    It wasn’t a £300m – £400m bid, it was a proposal to provide funding for a stadium that was reportedly going to cost £300m – £400m to build.

    Why he didn’t look at it could be for any number of reasons – but I can’t think of a good one (from LFC’s point of view).

    Then again, although it’s probably the biggest strange decision he’s made (if he’s supposed to be here for LFC’s good) it’s not the only one.

    It’ll all come out in the wash, I’m sure.

  27. Jim,

    Thanks for your reply. I can understand why Johnson was bought for what seemed a huge amount. Didn’t know until now how much we got back for Keane.

    Looking forward to some biographies once all this is distant history!

  28. Jim,

    Our worst nightmare could be happening. Paul Kelso at The Daily Telegraph is reporting tonight that Hicks is attempting to broker a refinancing deal with RBS.

    I’m sure you already know of this. Thoughts? I like many others will be horrified at this although probably not entirely surprised.


  29. Further to Rays comment, news in the Guardian this morning about Hicks in London looking to refinance and brooker deals in order to hang on to what he’s got…surely this cannot be allowed to happen? Can Broughton and the rest of the board stop him from doing this?

  30. Look back through the archives, some people said this man would destroy our club. Isn’t it time someone put out a contract on him ?
    Come on Jim what’s going on ??

  31. I have just read the NOTW article about Tom Hicks arranging a new loan facility with a USA Company. I have to confess of my amazement and digust at the outstanding lack of integrity, honesty and regard for others shown by Hicks. I realise there is a lot of money at stake but, doesn’t his own name and reputation mean more to him than his greed of money, it would appear not.

    If this loan goes through, then I think it will mean the end of LFC, the senior players will want to leave, and who could blame them, maybe even the staff will want to go, I for one would ot want to stay and work for a boss like Tom Hicks.

    One statement the fans can send out to Hicks, his American bailout merchants, RBS and to the LFC Board, is to boycott everything that is LFC ,NOW, don’t wait for 6th October, it will be too late then, it is the only action the paying public can deliver., to state that the fans will not pay entrance fees simply to see their money pay for the finance charges Hicks incurs and to see their club run into the ground.

    It would seem integrity only belongs to the poor and not to the rich, what a sad world we now live in.

  32. I’ve not said too much about the alleged attempt to refinance with Blackstone because I’ve been trying to work out the truth of what’s been said, there’s a massive amount to take in and a lot of conflicting information – not to mention the usual question marks where something or other doesn’t quite seem to fit.

    And that’s no surprise. People don’t leak information out of the goodness of their hearts. They leak it as a means to an end. The good guys and the bad guys. Well, I say ‘good guys’, not sure if there are any.

    I can’t help but think that if Hicks wants to refinance externally from RBS he can do it without the board having any say in it, or even knowledge of it, whatsoever.

    He’s reportedly using a US company for the refinance, so why aren’t they supplying funds to the Cayman or Delaware version of “Kop”? Doing it at that level, and paying RBS off in full, completely bypasses the board. Secure it on the company that owns your shares in the UK companies. Do that, sack the current board, install your own board. Ruthless, nasty, not good for LFC in any way shape or form – and best done as quietly and slyly as possible just to be sure there’s no attempt to block it.

    So why hasn’t he done it?

    My view is that whatever he’s been offered as a deal by Blackstone is not as good as what he thinks he can persuade RBS to offer. Either that or he thinks it will flush a buyer out, or force one to up their price to something closer to his own needs.

    RBS have done well out of LFC and they’ll have a big hole in their income if the debt is settled. There’s also another potential hole for them if they lose the more “day to day” banking contract with LFC. This is the worry – that RBS decide they can’t risk losing all their LFC business so give H&G more time to find a buyer.

    But how much longer can LFC survive with the levels of debt, and the structure of it, that we have with RBS?

    I’ve heard a number of different versions (not all out in the public domain yet) of how the debt with Blackstone might be structured. It ranges from something that would be acceptable (but would already be done because there’s no way on earth the board could block it, it just isn’t ‘bad’ enough) to the kind of structure that would see us struggle to make it to the end of the season (and therefore wouldn’t even be offered, after all even hedge fund types want their money back).

    I’m getting to the point now where I feel we’ve got to come up with a way of saying what we do want, instead of saying what we don’t want.

    And I think it’s time all involved (the board, the owners, the banks, the other lenders, the potential owners if there are any) started talking to each other instead of sending coded messages via advisers and back pages.

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