US consortium see second £400m West Ham offer rejected but plan third bid

The American consortium proposing a takeover of West Ham were rebuffed for a second time after following up their first approach with a £400m offer at the end of last month.

It is understood the would-be buyers, who are involved in US sport, were not disheartened after failing with an opening offer of £350m at the start of August. The group remain interested in buying West Ham, who are owned by David Gold and David Sullivan, and have made their intentions clear by returning with a higher offer.

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Their second bid was not enough to tempt West Ham into a sale. Although Sullivan and Gold have seen their standing with supporters fall since the move to the London Stadium in 2016, it will take a much higher price to convince them to alter their stance.

The bidders have entered a cooling-off period and plan to monitor developments before making a fresh bid in the next month. A source has told the Guardian that the group has drafted a seven-year business plan to improve the club’s finances. West Ham, who pay £2.5m a year to rent their ground, made a pre-tax loss of £28.8m in the last financial year and have encountered difficulties because of Covid-19.

The consortium, who are exploring the possibility of buying the London Stadium, acknowledge that completing a takeover will be hard. An obvious complication is that the deal under which West Ham moved to the London Stadium includes an agreement that Sullivan and Gold will have to pay a 20% penalty to the taxpayer if the club is sold for more than £300m before March 2023. The bidders accept that Sullivan and Gold, who bought the club in 2010, will want a return on their investment.

But the bidders believe that Gold, Sullivan and Karren Brady, the club’s vice-chair, could be under greater pressure if West Ham’s results are poor in the next month. The trio encountered anti-board protests from supporters earlier this year and were strongly criticised following the recent sale of Grady Diangana to West Bromwich Albion.

West Ham’s board promised they would challenge at the top of the Premier League after leaving Upton Park. They have made no signings since narrowly avoiding relegation last season and face a daunting run of Premier League fixtures after losing 2-0 to Newcastle in their opening game. Their next six games are against Arsenal, Wolves, Leicester, Tottenham, Manchester City and Liverpool.

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London Stadium sources have questioned the strength of the group’s interest and pointed out that Premier League clubs receive inquiries on a regular basis. Club sources have also said the group has not supplied proof of funding.

The bidders insist their interest is genuine. The value of their first offer was based on the proposed £300m takeover of Newcastle by a Saudi Arabian-led consortium, plus an extra £50m because of West Ham’s London location. The offer was rebuffed by Sullivan, who owns a majority shareholding of 51.5%.

Sullivan made it clear he was not interested in a sale and raised the possibility of the bidders investing in a minority stake but the consortium will consider a partial sale only in return for a controlling interest.