There has been yet another development in the complicated and protracted business of selling Liverpool Football Club with an announcement by Kenny Huang that he is withdrawing his bid. However, even this is not as straightforward as it appears on the surface as there are those who think that it is a negotiating tactic on his part. Certainly one sentence in his statement would appear to leave the door open for a renewed bid.
There has been yet another development in the complicated and protracted business of selling Liverpool Football Club with an announcement by Kenny Huang that he is withdrawing his bid. However, even this is not as straightforward as it appears on the surface as there are those who think that it is a negotiating tactic on his part. Certainly one sentence in his statement would appear to leave the door open for a renewed bid.
Huang stated that he had been frustrated by a perceived lack of progress. He felt he was not being taken seriously by Liverpool chairman Martin Broughton. Huang’s camp claim that he has provided all the documentation necessary to establish that his bid was credible, although on the Liverpool side it was claimed that this material had been produced rather slowly.
There was always some uncertainty about who Huang’s backers were. The China Investment Corporation was mentioned, but the sovereign wealth fund dismissed the whole idea as preposterous. A wealthy investor of Chinese origin in the US was then brought into the mix, but he too issued a denial.
The attraction of Huang’s bid was the potential to mobilise a large Asian fan base and these latest developments undermine the credibility of chairman Martin Broughton who was brought in to conclude a deal. Fernando Torres must be wondering if he made a wise decision in staying after he was told that new investment to reinvigorate the club was on the horizon.
There have been demands that Broughton should come clean with Liverpool fans and give them some account of what has been going on, but no doubt he would argue that commercial confidentiality comes before transparency.
The state-owned bank Royal Bank of Scotland are becoming increasingly frustrated with developments, or rather the lack of them, and may yet take charge. One of the problems throughout has been the high asking price demanded by the current owners and Kenny Huang certainly fell short in that regard with his offer of £325m.
One nightmare scenario is that the idea of Barclays Capital, the investment bank brokering the deal, refinancing Tom Hicks and George Gillett has been revived. They would become the lead bankers in a new consortium which would be the worst possible outcome from the viewpoint of Liverpool fans.
Fundamentally, Liverpool is a sound and profitable business which generates plenty of cash, but it is being weighed down by the debt structure created by the current owners to acquire the club.