DIC granted due diligence, but Hicks still hanging on

Oliver Kay of The Times is reporting tonight, under the headline Liverpool’s American owners set to sell, that Liverpool’s co-owners Tom Hicks and George Gillett Jr have granted Dubai International Capital permission to inspect the club’s books. But the headline is a little misleading, giving the impression of an imminent sale. In fact talks are still some way from being complete, as Kay’s article actually explains.

According to Kay, DIC are looking at the books “with a view to making an official takeover bid next month.” However Kay also repeats what has been reported heavily of late – that Hicks is reluctant to sell up completely. Kay writes that Hicks “plans to retain some of his shares and some of his influence at Anfield for the immediate future,” but says that “face-to-face discussions with DIC officials in Dubai and, more significantly, London last week have brought a deal closer.”

Kay reports that his sources in the US have “indicated that they are ready to demonstrate their willingness to sell by granting a period of due diligence to DIC.”

Kay also confirms what we’ve already heard, that Gillett’s half-share is likely to be sold by the middle of next month. What is still cloudy is exactly how the club’s ownership will be split at that stage. Gillett will be out of the picture of course, but the Hicks camp were maintaining very recently that their stake wasn’t up for sale. The question really was who would be buying the Gillett share – DIC, Hicks, or both? According to Kay, DIC are looking likely to buy the whole of Gillett’s share, and Hicks is also going to sell part of his own share to them: “Hicks is likely to sell only part of his stake initially, leaving DIC in majority control of the club but retaining some interest and his place on the board, at least in the short term.”

Kay does raise the possibility of Hicks buying Gillett out, but far from anything being decided, he reports that talks are only moving along slowly: “Hicks’s abrasive manner means that he is regarded as the most likely obstacle to any deal being completed, but discussions are said to be progressing “sensibly and professionally”, albeit slowly. Although Hicks could, in theory, buy Gillett’s stake in order to strengthen his own bargaining position, that is thought to be unlikely.”

In fact talks are moving so slowly that DIC haven’t actually agreed a price with either Gillett or Hicks according to the report. Kay says that Hicks and Gillett have valued the club at £400m, but that DIC would be hesitant to pay that kind of price if the Reds look like missing out on Champions League qualification for next season.

Kay also points out that DIC aren’t yet briefing anyone on how exactly they expect to run Liverpool if they do take the club over, saying nothing has been said, “beyond its eagerness to conduct a wide-ranging review of all departments of the club.”

The Hicks camp are certainly continuing to let it be known that they do not intend to sell up, in fact they claim they intend to take on a more active role at the club in the future. The impression they are giving is that they are unable to make any changes until Gillett is out of the picture, but they certainly seem to have a good few ideas in mind. It remains to be seen how good those ideas would be, if they ever get the opportunity to put them into practice. They certainly want it to be known that they don’t feel under any pressure to dispose of their half of the club.

Meanwhile Gillett remains completely silent. He’s not speaking to anyone about the club or his role in it, having dragged his son Foster back to North America after clearing his desk in Liverpool.

DIC clearly want to buy into the club, but it’s also quite clear that a price is still to be agreed. The opportunity to inspect the books gives DIC the opportunity to work out their own valuation of the club, and in turn to work out how much they are willing to offer.

If DIC pay enough money, Hicks can minimise his own liabilities on the club without having to sell up in full, and if reports are to be believed then one of his demands in that deal would be for him to continue to have representation on the club’s board. DIC would be majority shareholders, but Hicks would still have a certain amount of power.

Overall, this report of permission being granted to DIC for due diligence is good news and it’s the first real sign of progress in some time. But it’s also a long way short of being proof that DIC are to take the club over in full. Decisions are still to be made, but both the Hicks camp and the DIC camp are each determined to show they are confident of getting their own wishes.