Owners may yet halt deal
LIVERPOOL’S sale to American group New England Sports Ventures could be delayed or even derailed by a legal challenge from current owners Tom Hicks and George Gillett, sports business experts warned last night.
Reds chairman Martin Broughton is adamant the board has the right to sell the club to John Henry’s NESV for £300m, even against the owners’ wishes, and is “confident” of being proved right in court next week.
Hicks and Gillett have opposed the deal because they stand to lose around £140m on their investment, and the case is now expected to go before a judge after the duo failed to remove Broughton and two other board members.
That move has bought Hicks and Gillett extra time to either secure refinancing of the £280m they must pay Royal Bank of Scotland by the end of next week, or come up with another buyer willing to pay a higher price.
And while neither of those plans appear to be very far advanced, football finance expert Joe McLean of Grant Thornton believes it could cause enough controversy to force RBS into relaxing their stance.
“If Hicks and Gillett put up a huge fight, which they may do, the bank may back off and give them another month to find a solution,” McLean told City PM “I’d imagine there’s lots of frantic behind-the-scenes activity going on. If they get refinancing it’d have to be personally borrowed resources. They cannot use the club’s future incomes to secure borrowing.”
Graham Shear, a partner at Berwin Leighton Paisner, told City PM: “My gut feeling is the owners are running out of time. They could buy more time with a legal dispute, or end up dealing directly with bidders and trying to get a better price.”
Key to Broughton’s position is his belief that he has a signed undertaking from Hicks and Gillett giving him the right to sell the club if he finds a suitable owner. Shear added: “The question of whether the board can force through a sale depends on to what extent possible contractual undertakings take primacy.”