Moores stands in way of Liverpool FC bid

[tomski]

Moores stands in way of Liverpool FC bid

 

by Frank Kane

 

 

Arabian Business Weekly Update:

http://www.itp.net/business/news/details.p...1&category=

 

 

Bright future: Liverpool Football Club?s proposed US$200m new stadium could be funded by DIC money.

Dubai International Capital, one of the investment vehicles of the Dubai government, is leading the race to buy Britain?s Liverpool Football Club ? but several problems could yet stall the deal.

 

DIC executives travelled to Britain last week to meet with their Liverpool counterparts and advisers to try to resolve the tricky position of David Moores, the Liverpool chairman, who has a 51% shareholding.

 

Both Liverpool, controlled for decades by the Moores family, and DIC confirmed last week they were in exclusive talks about a financial package to take control of the debt-laden club, which is still regarded as one of the great brand names in international sport.

 

DIC chief executive Sameer Al-Ansari said: ?We will be commencing due diligence in the coming days and continuing discussions with Liverpool which may or may not lead to a formal offer.

 

?We are supporters ? of the game and of the club,? he added. ?Liverpool?s investment requirements have been well-publicised and we hope we can agree a deal that will provide the club with the funds it needs, both on and off the pitch.?

 

The prospects of a deal were also talked up by Liverpool chief executive Rick Parry: ?This is the latest step on the road of finding the long-term investment that the club needs,? he said. ?This is very important in terms of the proposed new stadium, which is key to plans for the regeneration of the local community.

 

?On the pitch, Liverpool remains focused on winning and, here again, this is all about doing a deal that gives us the long-term resources to do that,? Parry added. But sources close to the negotiations between the two sides do not think a deal is close to being tied up, and suggest it may take until next year to complete the due diligence process.

 

The Reds? cash needs are urgent and apparent. With some US$157m of bank debt and another US$393m the estimated cost of a new stadium, the club needs a financial injection to allow it to compete at the top level of the European game. It has been noticeably falling behind well-financed clubs like Chelsea and Manchester United in recent years.

 

DIC is willing to invest around US$884m, but advisers believe there is as yet no agreement on a central issue, which could still derail the deal: the value put on his controlling 51% per cent stake by chairman David Moores.

 

Liverpool shares are not traded on an official stock market, but the most recent transactions have valued them at US$6485 each, valuing the clubs share capital at around US$226m.

 

Moores is thought to have asked DIC for at least US$8845 a share, to reflect a takeover premium for his stake. Dubai's DIC believes this money would be better spent on investment in the new stadium and players.

?It is an issue which will have to be successfully negotiated,? said a Dubai adviser. ?If he [Moores] holds out for too much he might just negate the benefits of the deal.? Also under discussion are the other major shareholders in the club. Businessman Steve Morgan ? who has been critical of the Moores regime in the past ? has around 10%, while broadcaster ITV has a similar stake, inherited from the old Granada television group.

 

Moores? uncompromising stand on price has been a stumbling block in the past. George Gillett, owner of the Montreal Canadiens ice-hockey team, proposed a similar deal to DIC?s earlier this year, only to have it knocked back by Moores' determination to get full value for his shares.

 

One possible compromise would see DIC buying a minority, but controlling, stake and investing capital directly into the new stadium. Moores would remain a shareholder, possibly with an honourary position at the club.

 

?If he stays on it might make Liverpudlians more comfortable about the new owners,? said one adviser. However, this arrangement is unlikely to comfort DIC, which has a track record of seeking full control for most of its other investments, like the Tussauds waxworks tourist attraction and the Travelodge hotel chain.

[Tosh]

How can DIC take over the club without reaching a deal with Moores who holds the majority share?

 

And does anyone seriously think they'd have got as far as due diligence without agreeing a (with contingencies) price with the "seller"?

 

AFAIK, no other shareholders have been contacted, at this point, by DIC.

 

So, IMO, bobbins...

[Kite]

putting two and two together and getting minus a half.

[McBain]

I'd be amazed if Parry, Rafa and half a dozen players are talking publicly about the deal if there's still s***loads of negotiating to be done

 

It would be jumping the gun in the extreme

[Tim]

I gave up when it trotted out the old "debt-laden" bit like all other rubbish reports. $157m of bank debt? Learn to read you f-ing idiots. (journalists that is)

[Maldini]

Morgan only has about 3% doesn't he

[Atticus Finch]

How can DIC take over the club without reaching a deal with Moores who holds the majority share?

 

 

The article is utter tosh, but there is a way this could be done.

 

If someone purchased all the other shares AND the unissued share capital (this latter is the key point) they would have a majority shareholding without paying Moores anything - although he would have to agree to the purchase of the unissued share capital.

[KBR]

That article is rubbish. The share price has already been decided between both parties, or so i've been told. The ONLY way this deal is going to fall through is if everything doesn't stack up in due dilligence.

 

There are a lot of people out there who really don't want this deal to go through, for what ever reason. Expect a lot more articles like this. So just chill out, and enjoy the ride... and lets see more crazy threads on formations & who we are going to buy!

[fyds]

Morgan only has about 3% doesn't he

5%

[AnfieldCop]

I have heard rumours that Moores is trying to sell 31 % to DIC

[boohog]

And does anyone seriously think they'd have got as far as due diligence without agreeing a (with contingencies) price with the "seller"?

 

Normal practice would be a non-binding (subject to due diligence) offer pre-exclusivity which is the stage the press have implied DIC are at now. However given this is not an auction process with a number of competing bidders, the sale process could be run in whatever fashion the club wants to run it.

[floyd]

I get really, really cheesed off, when I see an article on Liverpool regarding money matters, and do not see, any where in the article, the one and only credible source out their.

Prof Tom Cannon.

[Armin_Tamzarian]

I think that's an interesting article. It suggests an ongoing negotiation process as opposed to the 'done deal' which some have suggested. Certainly it's not the first to suggest that Moores may retain a substantial interest in the club. Remember that the outline of the Thai proposal was for a combination of some of Moores shareholding together with the unissued shares, not the full amount.

 

From a business perspective despite the truisms about never making money from investing in football there are good reasons to retain an interest in Liverpool post investment. As well as a reinvigorated club due to stadium and team spending if the combined TV deal falls apart and the biggest clubs can sell their own matches any current valuation would look very conservative.

 

Anyway, to me articles such as this suggest that there is still a long way to go and although the Liverpool board may have decided on which investor they wish to work with the full shape of the deal is not yet set in concrete.

[Mike]

I think that's an interesting article. It suggests an ongoing negotiation process as opposed to the 'done deal' which some have suggested. Certainly it's not the first to suggest that Moores may retain a substantial interest in the club. Remember that the outline of the Thai proposal was for a combination of some of Moores shareholding together with the unissued shares, not the full amount.

 

From a business perspective despite the truisms about never making money from investing in football there are good reasons to retain an interest in Liverpool post investment. As well as a reinvigorated club due to stadium and team spending if the combined TV deal falls apart and the biggest clubs can sell their own matches any current valuation would look very conservative.

 

Anyway, to me articles such as this suggest that there is still a long way to go and although the Liverpool board may have decided on which investor they wish to work with the full shape of the deal is not yet set in concrete.

 

very unlikely and absolutely unheard of.

no self respecting business on the planet would give a prospective buyer carte blanche to go through its washing, clean or dirty without first agreeing what the projected deal was.

[Kite]

I think that's an interesting article.

Would you not find it more interesting if it was factually correct?

[Armin_Tamzarian]

very unlikely and absolutely unheard of.

no self respecting business on the planet would give a prospective buyer carte blanche to go through its washing, clean or dirty without first agreeing what the projected deal was.

 

I don't know never having been party to a takeover, is it possible that there are more than one options still on the table, ie full or partial takeover depending on results of due diligence?

 

Would you not find it more interesting if it was factually correct?

 

Yes, but there's factual inaccuracies in virtually all articles on LFC but that's not to say there aren't interesting elements in there as well.

 

The interesting thing in that article are the quotes from the 'Dubai advisor' supposedly giving the Arab viewpoint on the takeover. This might not be someone close to DIC, indeed the journalist might've made them up. but I found them interesting.

[Mike]

I don't know never having been party to a takeover, is it possible that there are more than one options still on the table, ie full or partial takeover depending on results of due diligence?

 

unlikely. the variable will be cost.

[RP]

"said a Dubai adviser" ??? Have you ever seen a more tenuous link??

 

What on earth is "a Dubai adviser" anyway? The phrase doesn't even make sense - and there's probably a very good reason why it doesn't make sense!!

[cymrococh]

What on earth is "a Dubai adviser" anyway?

a person who advises on Dubai.

[Stevie H]

"said a Dubai adviser" ??? Have you ever seen a more tenuous link??

 

What on earth is "a Dubai adviser" anyway? The phrase doesn't even make sense - and there's probably a very good reason why it doesn't make sense!!

 

he tells the sheikh whether dubai or not dubai the club.

 

sorry.

[RP]

a person who advises on Dubai.

 

 

That is the logical definition.

 

Like a Travel Agent then?

[fyds]

Dubai, or not Dubai - that is me coat...

[Roscoe]

the content confirms the suspicion given by the line 'Weekly business Update' that this is a (fairly poor) attempt to throw together all the strands of the story accumulated over a 7 day period and come up with something a little different.

[boohog]

That is the logical definition.

 

Like a Travel Agent then?

 

Why would the papers go through all the hassel of making up a story only to claim it was based on quotes from a travel agent? You'd have thought they would have at least said 'a city financial source' or somesuch. Maybe they were running out of column space....