Approaching 24hrs has now passed since The Times broke the story that a credible bid for Liverpool Football Club had been recieved, of which the Royal Bank of Scotland (RBS) were aware, in the form of China born Kenny Hunag. The bid was initially believed to have been direct to RBS themselves to take over the £237m debt presently owed to the bank, providing a position of leverage on owners Tom Hicks & George Gillett to force their exit and also ensure that RBS would see the majority of the loans presently owerd to them.
Throughout the day pieces of information have been added to the developments from various news sources, namely the comments of an RBS spokesperson that they had not received a bid for the sale of the club and that in fact several offers existed, six in total being a common number quoted. Concerning RBS, much opinion was that the bank were correct in stating that Huang hadn’t bid for thre purchase of the club via them, his offer is believed to of course satisfy their primary creditor, so this use of words is technically correct should the bid of course be a valid one in that form. It was also a common trend amongst finance houses, journalists and fans alike that some of the additional offers being credited for the club maybe no more than a stalling point for the present owners, to source a buyer that would provide them with a higher profit return.
Should in theory Kenny Huang’s offer be accepted formally by RBS then the position would leave him with “considerable leverage” over the American present owners, forcing them to sell at a price with potentially minimum or zero profit. Of course there is also the view that Hicks & Gillett are extremely unlikely to favour such tactics and could opt to force the club down the bankruptcy route, a move that Hicks himself has shown he could be prepared to make from previous dealings with his US sports interest the Texas Rangers.
However Martin Broughton, recently appointed Chairman of Liverpool FC by Hicks & Gillett, has spoken to the Guardian this evening and issued a number of points concerning the bid process. Broughton, his role to specifically oversee the sale of the club, has moved to provide a little further clarity on some of the points presently in open discussion.
Broughton told the Guardian tonight.
“It still remains the objective to conclude a deal before the end of the transfer window,” “That remains the objective but there are no deadlines, and we will continue working to complete the process.”
The transfer deadline was one of the key factors initially pointed out to be a critical target area for Huang, alongside ensuring there was not a mass exodus of the clubs star players. The business is keen to invest in the existing squad prior to the start of the new season and make as much use of possible of the time between now and the end of the month when the transfer window then closes until the start of the new year.
Broughton conceded to the Guardian that 31 August is “a very important date” for fans and some Liverpool players, namely star striker Fernando Torres. “El Nino” and his management team are believed to have been appraised of the situation at the club since finishing the World Cup and up to the present day.
Martin Broughton has always been careful in the past to make clear that the sale of Liverpool Football Club was not something that was simply an auction for the highest bidder but a sale that was in the best interests of the club itself. For example a bid that met the stadium requirements and on going investment required but was a lower capital purchase overall than other offers received, could well be the bid that was finally accepted. Of course giving consideration to the logic that further offers exist for Liverpool, this could well mean that they are structured in different ways and would present a much higher profit return to the Americans than would present itself via Huang. This would also be a very bitter pill for many a Liverpool fan to swallow, having seen their club fall from its much financially stronger position when David Moores left the club, to where it sits today. A club of immense tradition and stature, ravaged close to submission via almost parasitic ownership and control.
Broughton added: .”There could be a possible realisation of an equity consideration but both George Gillett and Tom Hicks remain on the board and they have given commitments that the board of Kop Holdings [Liverpool’s UK parent] is the party that is responsible for the sale.”
Hicks & Gillett are believed to have placed a valuation on Liverpool of anywhere between £500m & £800m to ensure a profit return on their investment. An exact valuation has never been given for the club but many led this to believe it was always going to be as much as they could possibly get away with, given gloating comments made by Hicks once the club had been placed on sale concering four fold return intentions. Given the economic climate and the facts that surround the very well documented financial plight of Liverpool FC and its related holding accounts, close sources and professional opinion is that H&G will have to step down from that pedestal and be forced to accpet a much lower offering from any interested party.
With a clock that will only continue to tick louder and louder, it is known at the present time no due dilligence process has been started with Huang or any othe party and that no money has yet been transferred into an escrow account, one of the final steps before a transaction can be finalised. Martin Broughton also took time to time to reiterate the control that both Bar Cap and himself retained in the process to dispell initial theories, that the Chinese offering had been put forward via a different route.
Broughton commented to the Guardian; “Any bids that go straight to RBS – and there have been several – come to me and are directed to Barcap,”
“RBS are not involved. The control remains with the board.”
Liverpool fans will look on in hope that a positive conclusion can be reached that is going to start returning stability to this much adored club and the opportunity to return to the heights that its name suggests it should be allowed to. Transactoion completion times have ranged from anywhere between the next few days, to the end of August and even as late as October when the refinicing point arrives with RBS. Whatever the time frame it is still too long for the long suffering Liverpool fans, who feel the hatred grow for their owners a little more every morning that they wake.
Faith and trust are now placed heavily in the due dilligence process, the financial checks performed by Bar Cap and its associates, aswell as the simple honesty of those making any decision associated with bringing new custodians to the club. Honesty, to ensure that personal gain or the quickest possible resolution is not the first point on the agenda but instead the long term viability of the club.
A long dark tunnel may be ready to consider showing light again but there will be no objections for a small delay in reaching it, if it is to ensure with careful analysis, that actions such as Hicks & Gillett have sought to take in their tenure at L4 are never been seen at the club again.