There has been an extraordinary development at Liverpool with the board split over two new offers for the troubled club. The offers appear to be credible, but George Gillett and Tom Hicks want to reject them as they mean that they would not be able to walk away with a profit. Hence, they have tried to suspend two of the directors and replace them with their own nominees.
There has been an extraordinary development at Liverpool with the board split over two new offers for the troubled club. The offers appear to be credible, but George Gillett and Tom Hicks want to reject them as they mean that they would not be able to walk away with a profit. Hence, they have tried to suspend two of the directors and replace them with their own nominees.
One of the offers is thought to come from Asia and the other from New England Sports Ventures who own the Boston Red Sox. The offers are thought to be in the region of £300m which would pay off the Royal Bank of Scotland (RBS) loan and fees owed to the bank. They would also fund the new stadium in Stanley Park. The American owners were looking for an offer of at least £500m.
It is understood that New England Sports Ventures have been on the scene for some time. They are part controlled by John W Henry who is a futures trading adviser and a dollar billionaire, although he did fall out of the last Forbes list of such individuals. The Red Sox owners are regarded as a quality sports company worth $1.5 bn. The Boston Red Sox, regarded as one of the top ten sports brands in the world, is seen as their main asset, but they also own Rousch Fenway Racing, a leading Nascar team. They see Liverpool as an iconic brand which would sit well alongside their other assets.
The identity of the Asian bidder is not known. However, they have only become involved in the last week. They are not believed to be connected in any way to Kenny Huang who made a much publicised attempt to purchase the club in the summer.
The owners have attempted to remove managing director Christian Purslow and commercial director Ian Ayre from the board. They would be replaced by Hicks’s son, Mack Hicks, and Lori McCutcheon who is a vice-president of Hicks Holdings.
The two directors that the owners would like to oust are taking legal advice on their position. As Gillett and Hicks are the shareholders, it is likely that they could remove them. However, Purslow and Ayre consider that they have a case under company law and this is being investigated by the international law firm Slaughter and May.
It would be a desperate move by the owners to remove the two directors. They would certainly incur further reputational damage, although that does not seem to have concerned them too much throughout the whole saga. However, they did put out a rare statement last night in which they sought to justify their position in terms of the investment they had put into the club and an improvement in turnover.
The preferred scenario of most Liverpool fans would be for RBS to call in the loans when they are due at the end of next week, even if that meant a nine point penalty as the holding company would go into administration. That might be a price worth paying to get rid of the American owners. It is thought that RBS might be more likely to intervene now that two credible bidders for the club have appeared. However, if an agreed sale is held up by a legal challenge by the current owners, they might be prepared to extend the loans to allow the sale to go ahead without incurring a points deduction.
Liverpool would then in effect be state owned as the majority of the shares in RBS are in the hands of the UK Government. However, RBS would want to sell the club on as soon as possible and it looks as if purchasers are available. This has been said before, but this could be the end game.