• Liverpool Message Board

  • ANDREW ANDREW Sep 7, 2010 16:10 Flag

    Weres the take over gone?

    Hi all. After all the talk of big money buyers all over the place just a few weeks ago. What is happening to our beloved Liverpool take over.

    With Hodgson and Torres calling for an injection of money to keep up with the likes of City and Chelski. I just wondered if there was any info on the subject i may have missed.

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    • A friend working for Barlcays Capital, London, told me that the team that is responsible for the sale of LFC was seen getting into the office very early in the morning in the last couple of days, suggesting that something is going on. This is significant because it suggests whatever they are working on, it has eastern orientation due to time zone difference, it is definitely not N. America, my guess ....... India!

    • The good news is that I think sometime in Oct the issue will be forced, so we should know then if we have something to look forward to in the New Year or not.

      My biggest fear is that tweedle dee and tweedle dum will be able to renegotiate the loan with RBS and this drags out even longer. But if there really are serious parties interested in buying I think the bank will start to play hardball as its the best strategy to ensure they see re-payment.

    • I think you might be confusing putting a business into administration versus an issuance of a winding up order by a creditor. I believe that is what Inland Revenue did against Portsmouth, which forced the club to put itself into administration. I believe RBS would have the right to go to court to force repayment if the debt is not settled (or renegotiated) by the due date, at which time the court can seize assets on behalf of RBS up to the value of the debt. To stop the seizure the club can voluntarily go into administration, where an appointed administrator works out what debts can be paid and in which priority. Because the club is then protected from seizure of assets, in effect it forces debtors and creditors to negotiate if the total outstanding debt is higher than the assets.

      It’s at that stage where the bank might accept a conversion of debt to equity, or a renegotiation of the loan, although it could also happen before RBS went to court to force the issue.

      However I think you’re correct that is not a likely scenario. One I'd agree with you that I doubt the Yanks would give up equity, as they'd much rather renegotiate the terms of the loan. But second, assuming there is at least one viable buyer out there offering the Yanks at least some profit margin, I think they'd sell out before we get to that point.

      I use the analogy of a game of chicken because any potential buyers are waiting as long as possible to force down the owners expectations of how much profit margin is acceptable. The owners are in no hurry because if (and I hope this is the case) if additional suitors come in, they are also playing chicken with each other in terms of how much profit they'd likely offer the owners.

      Bottom line, and again I nor anyone else has a crystal ball, but I doubt we'll see much movement until October. Serious buyers will keep quite with cards close to the chest. RBS is a significant player in all this, and maybe the deciding factor of when and for how much the club gets sold for. But not because its likely they'll become owners (although it is possible) but because they hold the strongest card in forcing the issue, which is the right to force court action against the current owners, which will force all the other parties to show their hands.

    • Thanks all for the interesting read all be it a bit of a horror novel in places. Lets just hope Roy can keep things on an even keel on the Pitch while we hopefully get new buyers and some much needed cash injection.


    • Gah, you got here before me. ;oD

      The other 3 board members are the only people in place blocking G&H from going elsewhere and mortaging the players and stadium (I believe). Theres a good article on Adi's website about it if you care to look.


    • Ricky, what if the rest of the board, Martin Broughton, Ian Ayre and Christian Purslow agreed in favour of RBS converting debt into shares? It would be a majority vote so surley the yanks would have to allow it?

    • Dsteer, not sure about the law in England, but I see your point on who should be the party to file for administration. My understanding is that it is usually the creditors who need their collaterals (club's assets) to be protected from being misappropriated by the company's management, hence, they will file administration application (much like what the Inland Revenue did to Portsmouth). Can't see the logic of a company wanting to protect their assets when all the time the assets, more importantly, the use of those assets, are already in their control. But the point on administration is purely academic, it is just a legal process to signal to all parties (including potential buyers) not to play any poker games and get serious.

      Anyway, it has sidetracked my point, my point is RBS will not become the owner of LFC unless they convert the debt into equity, but they cannot just convert it, they need to get LFC's Board approval, meaning the yanks. But do you think the yanks will allow their shareholdings to be diluted to the point of lossing control? I doubt it, the yanks would rather sink together, like what they did to their other US franchise (and I hate the use of the word "franchise", just shows the americans never look at it as a business!)

    • I agree, I don't see the owners opting for administration. The only plausible reason for them to do so is either because they have no option because there are no realistic buyers, they can't re-negotiate the loan, and or can't come up with the money. Second, if they really want to hang on to the club themselves, and are willing to fight tooth and nail to do so, but as they stated intention is to sell so long as their is a buyer that will give them some profit I'm sure that is the route they'd take.

      That is why I see this as a game of chicken. The question is who blinks first? The owners taking a lower asking price to get something of a profit for themselves, or the prospective buyers raising their price to secure a deal. I see it in neither parties interests to see the club enter administration as there is no guarantee what will come out the other side and how much it might be worth.

    • While these are all valid points I do not see the common sense in the Yanks opting to put the club into administration.
      Selling valuable assets like Torres would devalue the club even further. Ok it may mean that they can make enough to pay the bank but this is a club they bought as a business and one that has far less prospects after a firesale of personnel.
      It is completely counter productive to their cause. Likewise if the club falls into the hands of RBS. LFC has a base value and that is more than the bank are owed FACT, so they would not sell off players making the club less desirable to potential buyers.
      Basically this is a simple case of buyers biding their time until the asking price reaches as close to the base price as possible. The less they pay the better! the club will be sold either way

    • So it is more a case of the owners (hicks and gillett) putting us into administration rather than then bank? Scary thought.

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