There are various reports out on the situation with PCP Capital Partners trying to buy Newcastle United from Mike Ashley.
Mike turned down an offer last Friday which was unacceptable and the two parties are now negotiating a different structure for the deal.
Ashley is said to be willing to be paid £60M a year over five years and not the deal he turned down.
That seems complicated and the bid included a relegation compensation clause, and a series of clauses where the overall price paid would be dependent on how the club perform on the pitch.
That’s very much like a transfer of a player where the selling club gets more money over time if the player performs well.
Of course, if Newcastle perform well the club will get a lot more money, and Newcastle could become a wealthy club.
With the right support to Rafa that’s even likely to happen – there I’ve said it!
But only then would the deal give Mike Ashley around £300M.
It seems Ashley wants a simpler deal without all those clauses in.
We’re not sure why PCP Capital Partners wouldn’t just pay £60M a year over five years.
Time is money and that five years gives the consortium plenty of time to come up with the money and with inflation that would be less than if they paid the £300M now.
If Mike Ashley is willing to do that, it seems a good deal for the consortium – but of course, we don’t know the ins and outs of what’s being discussed between the two parties.
But there is a caution in the Telegraph today from Luke Edwards who writes:
Newcastle are braced for a second offer to be made in the next few days and want to see a significant increase in the amount of money on the table.
If that does not happen, the talks will be on the brink of collapse and the club would effectively be taken off the market.
Staveley and her PCP financial backers are the only serious bidders and Ashley does not want a prospective takeover hanging over the business all season.
The thought of Ashley ending his attempts to fund a buyer will send a shudder of dread through supporters, who are desperate to see the end of his parsimonious regime on Tyneside.”
But he will not be pressurised into anything and has always maintained he would only sell for a price he believes is fair.
Here’s the full report in the Telegraph.
What we hope for now is the second offer – said to be due by the end of the week – will be a lot closer to what Ashley is willing to accept and with the owner now in the negotiations hopefully that is possible.
But as the Telegraph says – if the deal is again nowhere near what Ashley wants that could be bad news.
And the tragedy is with PCP partners the only group said to be left as serious bidders, the whole thing could collapse.
That would be a complete and utter disaster.