In what is going to be a busy week that will almost certainly see Tom Hicks lose his stake in Liverpool Football Club, a court hearing was announced earlier today that pitted Royal Bank of Scotland against Hicks “and others”.
The hearing will take place tomorrow. RBS have now issued a statement clarifying what the action specifically relates to:
RBS in its capacity as lender to the Kop group of companies received the benefit of various contractual undertakings from Mr. Hicks and Mr. Gillett in relation to the corporate governance arrangements that Mr. Hicks and Mr. Gillett agreed would apply to the Kop group of companies with effect from April 2010.
Those undertakings provided for the appointment of Mr Broughton as chairman of the board and the appointment of the chief executive and commercial director of LFC to the Kop boards.
As is well known, Mr. Hicks and Mr. Gillett purported to make changes to those corporate governance arrangements on 4 October. This was in breach of those contractual undertakings.
In light of that purported breach of contract RBS sought and obtained on Friday 8 October 2010 an interim injunction against Mr. Hicks and Mr. Gillett until a further hearing scheduled for tomorrow.
Among other things, that interim injunction prevents Mr. Hicks or Mr. Gillett taking any steps to remove or replace Mr. Broughton from his position as chairman of the board of the Kop companies or from taking any other steps to appoint or remove any directors from the board of the Kop companies.
The proceedings tomorrow represent the continuation of Friday’s proceedings and relates to breach of contract only. These proceedings do not represent steps by RBS to enforce its security or to appoint an administrator.
We are unable to provide any visibility on timing for resolution of these proceedings at this stage.
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“Mr Hicks and others” presumably reflecting the fact that it could be Mr Gillette or Mill Financial or whatever…
The bbc are now claiming the Asian bidder plans to bid again.
http://www.bbc.co.uk/news/business-11518079
The bidding contest for Liverpool FC may not be over, the BBC can reveal.
The runner-up in the contest, Peter Lim, a Singapore billionaire, is to approach Liverpool’s board with a view to making a higher offer for the club.
According to sources close to Mr Lim, he was the club’s preferred bidder in the closing stages of the auction.
He had talks with Liverpool’s chairman about how to announce his takeover, such was the apparent confidence that he would win the contest.
‘No loans’
Mr Lim learned he was not the victor only a few hours before the club’s chairman, Martin Broughton, announced on 6 October that Liverpool would be sold to John Henry’s New England Sport Ventures for £300m.
Continue reading the main story
“Start Quote
He never had a chance to negotiate directly with Royal Bank [of Scotland] He was expecting to do so, after agreeing the takeover with the board”
End Quote Source close to Peter Lim
Mr Lim, who is being advised by the British firm of lawyers Macfarlanes and by the Wong Partnership of Singapore, still does not know why Mr Broughton went with New England Sports Ventures, owners of the Boston Red Sox.
He believes that in purely monetary terms, his offer was at least as attractive as Mr Henry’s.
Mr Lim, too, was offering to repay all of Royal Bank of Scotland’s and Wachovia’s £200m of long-term debt, to take on £60m of other debt and to inject £40m of working capital.
What’s more – and Mr Lim regards this as crucial – all the money being provided by him would come from his own cash resources. He is not planning to borrow any of it.
I understand he is also offering to provide tens of millions of pounds to Liverpool’s manager, Roy Hodgson, to allow him to buy players when the transfer window opens in January.
According to executives close to Mr Lim, he was told by Mr Broughton that his ability to fund the takeover for cash, and the size of his cash resources, meant he was a more attractive owner than New England Sports Ventures.
Mr Lim was told that Liverpool’s board was concerned that New England Sports Ventures would have to borrow to finance the takeover – raising questions about whether Liverpool really would break free from the financial shackles perceived to have been imposed by the current owners, George Gillett and Tom Hicks.
In the event, New England Sports Ventures have insisted it will not load up Liverpool FC with debt.
But there are no guarantees that there will not be significant debt further up the corporate ownership structure of New England Sports Ventures – which could limit how much money Mr Henry and his colleagues can inject into Liverpool in the future.
Mr Lim is keeping a close eye on the court case, which starts on Tuesday.
The case is supposed to rule on whether Mr Broughton can sell Liverpool to New England Sports Ventures against the wishes of Mr Hicks and Mr Gillett.
The Singapore billionaire believes the judgement in that case may give him an opportunity to bid again, whatever Mr Broughton may wish.
Business empire
Mr Lim is also prepared to buy Liverpool, should it ultimately collapse into administration under UK insolvency procedures.
According to sources close to him, he feels that he may have been shut out because New England made an offer to Royal Bank of Scotland to pay some of the £40m penalty fees the banks have demanded.
If that is the case, he believes Royal Bank may have done a poor deal, because he would be prepared to pay RBS and Wachovia more than the £10m or so which New England Sports Ventures is said to have put on the table.
“He never had a chance to negotiate directly with Royal Bank [of Scotland],” said a source. “He was expecting to do so, after agreeing the takeover with the board.”
Mr Lim has an estimated net worth of $1.6bn (£1bn), according to Forbes Magazine.
He made his fortune in fashion, logistics and agri-business.
His interest in English football stems from his ownership of several Manchester United themed bars in Asia – which have persuaded him that there is huge global potential for making money from top-flight English football.
Meanwhile, Royal Bank of Scotland announced on Monday afternoon that it had obtained an injuction to prevent Liverpool owners Tom Hicks and George Gillett from sacking Martin Broughton or any other of the club’s board members ahead of Tuesday’s court case.