Newcastle made the front pages of the Financial Times (FT) this weekend with news about the potential takeover of the club by Amanda Staveley and her PCP Capital Partners group fronting the deal.
The investors are said to come from the Middle-East with some reports saying there is also some Chinese investment.
The Financial Times reports they think it’s going to be difficult now for the deal to close before the end of the year with the price still to be agreed between the two parties.
Once a deal is agreed in principle (which must include the price) there begins an exclusivity period of between 30 and 60 days (it can vary with each deal) so that the deal can be completed with the prospective buyer.
During this time the seller cannot enter into any communication or contact with other potential buyers.
Amanda Staveley – potential new owner of Newcastle
The FT is also reporting they think the first bid was worth around £260M which is interesting as that’s about what Mike Ashley has invested in the club.
He paid £134M to initially buy the club’s outstanding shares and then around £130M in interest-free loans.
They also claim the opening bid came a week last Thursday and was around £260M; nobody has mentioned specifically what the fee was other than it was fairly close to £300M if all conditions were met.
But the first bid had various clauses in it that Mike Ashley didn’t particularly like – including one which penalized Ashley if the club were relegated this season.
That clause is now unlikely to go away with Newcastle starting to struggle in the league table.
That could even be the stumbling block to a deal that may still not happen – even though Newcastle fans are hoping and praying a deal can be made.
This is some of the FT report as published today by the Chronicle:
“Questions remain over her latest approach for NUFC, not least around the identity of investors in the PCP fund bidding for the club.”
“While Ms. Staveley has lined up investors from Dubai and Saudi Arabia, those with knowledge of the situation say much will depend on the structure of a successful bid.”
“PCP could finance a smaller sum, or a deal via installments, with no outside investors.”
“Mr. Ashley’s allies, meanwhile, have expressed frustration that publication of selective details of Ms Staveley’s offer, which they regard as untenably low and riddled with conditionality, could raise unrealistic hopes among fans.”
It’s interesting that PCP Capital Partners could bid for the club with no outside investors needed.
Maybe the best approach is to pay Mike Ashley over say five years – that would make it a lot easier financially for any buyer and Ashley is willing to defer the payments.
If these negotiations drag on and Newcastle keep dropping in the league table and Ashley will not allow a relegation clause in the deal – then the possibility of a deal will likely diminish substantially.
What do you think?