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Tuesday, September 29, 2009

Making sense of Liverpool ownership

29 September 2009

by Jerrad Peters

 

Trying to get a sense of Liverpool's ownership situation is more difficult than stopping Fernando Torres in full flight. Nearly three weeks ago, George Gillett—one of the club's co-owners—revealed on a Toronto radio station that the club's finances had "never been better" and were in "outstanding shape." The 70-year-old American businessman had just sold his majority stake in the National Hockey League's Montreal Canadiens to the Molson family and was expected to infuse the funds into cash-strapped Liverpool.

But, he added, "If someone gets beamed in who's got bags of money, things may change."

That "someone" it seems, is Saudi Arabian Prince Faisal bin Fahd bin Abdullah al-Saud. He watched Saturday's 6-1 win at home to Hull City in the stands with Gillett and subsequently admitted his interest in purchasing a major stake in the club, perhaps as much as Gillett's entire 50% holding.

Prince Faisal, who heads the F6 sports investment company, has said the transaction could be worth anywhere from £200 million to £350 million, depending on how much of his stake Gillett is willing to sell. The other co-owner—Tom Hicks—has the power to veto any such deal, although he would be unlikely to nix any sale of up to 25% of his partner's interest. It was initially thought that Prince Faisal was targeting Hicks' shares—a rumor that was dispelled after Saturday's match at Anfield.

In fact, Prince Faisal has already agreed a handful of minor partnerships with Gillett, including a deal to set up a pair of football academies in Saudi Arabia and North Africa and a pact to increase the presence of Gillett's NASCAR outfit—Richard Petty Motorsports—in the Middle East. Those partnerships, and the overhead agreement that set them up, provided F6 with an opportunity to purchase an interest in Liverpool.

According to F6 managing director Gassim Hamidaddin, "There was a clause in this agreement that opened the possibility of buying a stake in Liverpool."

Gillett, as it turns out, has been opening shopping either all or a portion of his Liverpool interest since March, when he hired Rothschild and Merrill Lynch to seek out potential investors. At the time, he was willing to sell "investment packages" worth approximately £50 million, although he now intends to cash in on a significantly larger portion of his stock in the Premier League club.

On Tuesday, Hamidaddin confirmed that a deal was imminent, although the exact stake had yet to be agreed.

"We have not reached a final agreement yet," he told Reuters. "We are discussing how much 25% or 50% in Liverpool will be worth."

But there's another twist. On Sunday, Gillett was spotted at the Mayfair restaurant Cipriani with representatives of an unnamed Indian energy tycoon. They expressed an interest in Liverpool on his behalf, at about the same time that Prince Faisal was crunching the numbers and delving into Liverpool's books.

On Tuesday, F6 spokesman Barry Didato stated that the company was continuing its examination of the club's finances, doing its due diligence before finalizing a deal. His remarks may indicate that the transaction has hit a snag, possibly brought on by the sudden interest from India.

Whether that's true or not it's anyone's guess. Ever since Gillett and Hicks purchased Liverpool Football Club in early 2007, truth has been harder to pin down than…Fernando Torres in full flight.

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