Friday 2 December 2016

Reds' takeover ultimatum

Huang sets two-week deadline for Liverpool board to accept offer

Paul Kelso

Published 03/08/2010 | 05:00

A workman applies a gold leaf to the Shankly Gates outside Liverpool's
Anfield stadium yesterday. Photo: Reuters
A workman applies a gold leaf to the Shankly Gates outside Liverpool's Anfield stadium yesterday. Photo: Reuters

Chinese businessman Kenneth Huang last night attempted to increase the pressure on Liverpool and their bankers RBS by indicating he will walk away from his proposed deal for the club if it is not concluded in the next two weeks.

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Huang is attempting to take control at Anfield by dealing directly with RBS, offering to repay some or all of the £237m debt incurred by American owners Tom Hicks and George Gillett in the course of their 2007 takeover.

His interest comes with club chairman Martin Broughton keen to secure a new owner by the end of this month in the hope that fresh investment will persuade senior players including Fernando Torres to stay at the club.

Hicks and Gillett agreed to sell the club in April after coming under pressure from RBS and Broughton is understood to believe that the transfer window represents the most likely period for a sale. Sources close to the club and the owners said last night that Huang was just one of a number of potential buyers to have submitted proposals to Broughton, and suggested he is attempting to secure supporter backing for his bid by going public.

Huang made his bid for the club public on Sunday evening only after a potential bid from Syrian Yahya Kirdi, who has previously been dismissed as not being a serious player by the club, was reported in a newspaper.

Huang, a Wall Street stockbroker and chairman of the Hong Kong-based QSL Sports group, is the front man for a sovereign wealth fund based in the Far East, but his advisors have not publicly revealed the source of the money.

Huang previously expressed an interest in buying the club in 2008 but was put off by a valuation of £650m, and was among a number of potential buyers directly approached by Broughton and investment bank Barclays Capital when they took charge of the search for investment in April.

It is understood that Huang's camp approached Richard Holliday, the RBS executive responsible for the Liverpool account, directly last month in an attempt to bypass the Americans and take advantage of disquiet at the bank about the club's future.

When asked directly about Huang's approach yesterday, a spokesman for the bank denied that they had any discussions with him or "any bidder for Liverpool". Only when pressed later in the day on the nature of their contacts with Huang did the bank concede that they had received an approach. They said that they referred him to Broughton and Barclays Capital.

valuation

Huang's bid is understood to value the club at around £300m, £500m short of the £800m valuation offered by Hicks earlier this year, and around half the price of offers Hicks and Gillett have previously turned down. While this valuation should be seen as part of a negotiation, Huang is clearly reluctant to offer the Americans any premium for their involvement with the club.

Sources close to Huang have said his consortium would also make funds available to Roy Hodgson in an attempt to convince top stars such as Torres, Steven Gerrard and Pepe Reina to remain at the club, and to begin work on the new stadium promised by Hicks and Gillett.

His chances of succeeding in his bid depend on the attitude of RBS and the Liverpool board. While Hicks and Gillett believe that they have added value to Liverpool and are unlikely to approve any bid that does not offer them a profit, Broughton, managing director Christian Purslow and commercial director Ian Ayre may take a different view. With Broughton having taken up his position on the understanding that a three-man majority on the Liverpool board would be enough to see the Americans voted down, Broughton, Hicks, Gillett, Purslow and Ayre each have a vote.

RBS has gradually increased its demands on Hicks and Gillett during the three years of their ownership, demanding greater levels of personal guarantees and security as the pair's American investments came under pressure following the global credit crunch.

In July 2009 they had provided £110m of personal guarantees against a total borrowing facility of £297m, £200m of which is secured by holding company Kop Football Limited and £97m by the club. In April this year, however, RBS demanded that the Americans agree to an exit strategy, a process that led to the appointment of Broughton and Barclays Capital.

RBS also only agreed to extend the lending agreement -- which was due to expire in the summer -- until October, although Broughton believes that the bank will be flexible over financing to help secure the best possible deal for the club.

The bank's apparent uncertainty about the Americans was indirectly expressed to the Premier League, which requires all its clubs to provide guarantees that they will be in a position to complete for the following season in March of the preceding season.

In March this year, RBS told the league that it would guarantee the club's finances until the end of the 2010-11 season, but could not guarantee those of the current owners beyond this autumn.

Huang (right) is now hoping to exploit that lack of certainty by persuading RBS and Broughton that, with club revenues under pressure following the failure to qualify for the Champions League, he is the only credible alternative to another season under the Americans' continued ownership. (© Daily Telegraph, London)

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