Liverpool fears grow over Hicks' takeover bid
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HICKS STICKS ... he is clinging onTOM HICKS is poised to outrage Liverpool fans by trying to force through a refinancing deal that would see him remain in charge.
The American has held a series of meetings in London - one of which was with the Reds board - as the October 11 deadline approaches when the Royal Bank of Scotland want a big chunk of their £280million debt paid.
Hicks and co-owner George Gillett value the club at £600m but, so far, no one has come close to meeting that figure.
Now the duo hope by pushing through another refinancing scheme, they can buy time to discover a big-shot investor - and prop up their crumbling business empires.
Hicks is said to have approached several US banks - one of which is FBR Capital Markets.
They have already failed in one such attempt, back in June, when the Anfield board blocked their plans.
The Americans are outnumbered three-two on that board, who oppose the plans to plunge the club deeper into debt.
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dont you just love the americans?
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Wall Street 2: Americans Never Quit
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PLEASE,THE AMERICANS ASSES!! DUN GO!! STAY WTH LIVERPOOL!! U HAVE BEEN GREAT FOR POOL!!!!!!!!SO RICH IN HISTORY,THERE ARE NO OTHER CLUB LIKE THEM,CRAZY FANS,WHO LIVED IN YESTYEARS,SMALL STADIUM,SMALL MENTALITY,THEY THINK EPL BELONG TO THEM,PLS CREATE ANOTHER HISTORY FOR THIS FAMOUS CLUB!! MAKE THEM BANKRUPT!!!!!!!!!
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Originally posted by dragg:
dont you just love the americans?
yeah i love lerner....sunderland's owner isn't bad either....
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americans just want money.
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A-KOP-ALYPSE NOW!
Hicks in plea to billionaire pal
TOM HICKS has unveiled devastating plans to delay the sale of Liverpool for up to TWO YEARS.
The Texan is on the verge of a £280million deal with The Blackstone/GSO Group to retain his share in the cash-stricken club and buy out partner George Gillett.
Despite the hatred towards him on Merseyside, Hicks told the rest of the Anfield board in a meeting this week the refinance agreement will be signed by October 1.
But in a move which will cause deep despair on Merseyside, the terms would ensure the American has until 2012 to find a buyer.
More worryingly for distraught Kop fans, the GSO deal does not involve any injection of cash for new players OR a new stadium. And it will almost certainly lead to the departure of Fernando Torres and Pepe Reina.
That prospect is prompting the rest of the Liverpool board to mount a legal challenge to stop Hicks finalising negotiations but even those closest to the deal fear there is little they can do to prevent him taking full control of the club.
Hicks convened a three-hour board meeting in London on Wednesday, where he delivered the bombshell news of his plans to deal with Blackstone/GSO.
Blackstone are one of the biggest private equity firms in the world with its chairman Steve Schwarzman worth an estimated £3billion. He is also a close friend of Hicks.
The meeting at the Blackstone HQ in London's Hanover Square was attended by chairman Martin Broughton, chief exec Christian Purslow and director, Ian Ayre and Finance Director Philip Nash.
Tellingly, co-owner George Gillett was absent from those talks.
He's given Hicks the green light to pursue a deal and is reluctant to ally himself to the rest of the board against the Texan. Gillett has, however, told Hicks his support is conditional on investment in the squad and stadium. That may yet prove the key to blocking a deal.
However, Gillett has defaulted on his own loan to RBS, forcing him to concede a degree of power to his business partner.
Hicks told his board he has no obligation to sell to any investor for less than a price he deemed acceptable - and the board has no authority to prevent him repaying the RBS debt and keeping the club with whatever funds he likes.
Hicks bluntly told Broughton the idea of Liverpool being sold for the value of the club debt - £282m - is unacceptable.
Hicks believes he has the legal right to pursue the GSO deal in the absence of any formal bid for the club since the sale process began.
Despite feverish speculation at the time, neither Chinese businessman Kenny Huang nor Syrian Yayha Kirdi ever made an offer for Hicks and Gillett's shares.
Hicks will attempt to present GSO's involvement as a step in the right direction, despite the obvious concerns.
The Texan thinks the involvement of Blackstone offers a platform for further investment. Club sources are baffled as to why, having failed to sell the club for the last two years at such a high valuation, Hicks still believes he'll succeed in two more.
Purslow, Ayre and Broughton have successfully resisted refinance proposals before because they believe Hicks is reneging on his public announcement in April that he wished to sell his shares. This dispute has been the subject of a legal battle since June but there was always a fear the respite was temporary. A court hearing to decide the future of Liverpool FC now looks inevitable.
By 2012, the value of the club is more likely to have plummeted due to consecutive years without Champions League football.
As Sport of the World first revealed a month ago, Anfield is in the grip of a boardroom war over refinancing.
Behind the scenes, the most ferocious battle to decide the future of the club is being fought right now.
The outcome is likely to be decided in various legal offices of America and London. The only other hope is for a credible buyer to make an 11th-hour bid for the club. Hicks' proposals do not have the support of chairman Broughton, MD Christian Purslow or commercial director Ayre.
The independent Kop board fears the GSO deal represents a nightmare scenario for the club and destroys any hope of a brighter future at Anfield.
There are claims it will end any chance of a new stadium and lead to the inevitable departures of star men.
Players such as Torres and Reina have openly demanded a change of ownership. Extending a period of limbo will effectively ensure this is their last season at the club.
Planning permission for the new arena on Stanley Park will have expired by September, 2011. And the GSO deal will also mean the debt against the club rises and interest rates increase.
This doomsday picture will be contested by Hicks, who is in talks with Blackstone's senior managing director and GSO co-founder Bennett Goodman.
The US equity firm Blackstone, who own GSO, is one of the most wealthy and well respected in the financial world.
Their chief executive, Schwarzman, is worth an estimated £3bn and has been dubbed The King of Wall Street during an impressive financial career.
The 63-year-old was listed in 2008 as America's 53rd-richest person. A year earlier, Time magazine named him as one of the 100 most influential men in the world. He lists former Presidents and White House chiefs of staff among his friends.
Blackstone's portfolio is vast and striking, including the London Eye. In normal circumstances, if such a company was interested in a full buy-out it would be a relief for Kop fans.
But there is unease because GSO have not declared any wish to take over the club, heavily invest in the squad, plough in finance for the stadium or retain any long-term interest.
They represent a short-term fix for Hicks. The only way Blackstone will own Liverpool FC is if Hicks defaults on his fresh loans in two years.
Blackstone/GSO's offer to Hicks effectively amounts to a multi-million bail-out.
They are loaning Hicks the money he desperately needs to refinance the £282.4m RBS debts and buy him extra time. Hicks will now have even longer to sell the club at the valuation of £600m he's been pursuing since the sale process began in April.
Just when Liverpool fans hoped the end of the American reign was nigh, they're now faced with the reality the period of uncertainty may continue.
Disillusionment among players and fans is already at epidemic levels.
The position of the current five-man board would also be subject to review. Barclays Capital's involvement in the sales process would effectively be over, as would Broughton's tenure as chairman.
That's why the rest of the Anfield hierarchy is desperate to block the deal and is adamant any refinance using Liverpool as collateral is illegal.
They have just two weeks to stop Hicks and find a buyer. Hicks expects terms to be signed by October 1, when the first chunk of the RBS debt must be repaid.
It's baffling to some why a financial tour de force such as Schwarzman is assisting Hicks.
GSO specialise in investing in distressed companies at high rates of interest but Hicks also appears to be benefiting from a personal friendship and political alliance with Blackstone's top man.
Cynics are already concluding that Hicks has convinced an old pal to help him out in a period of strife.
"A few weeks ago we were saying Hicks needed to pull a rabbit out of the hat," a Kop source told Sport of the World.
"It seems he's pulled out one of the biggest, wealthiest rabbits in Wall Street."
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LIVERPOOL NEWS
Liverpool on the edge as Hicks plans move
Tom Hicks and George Gillett are deeply unpopular figures at Anfield
Liverpool "teeter on the edge of a financial abyss" as ESPNsoccernet has learned that the proposed takeover plans of Tom Hicks could land the club with crippling interest repayments.
On the eve of Liverpool's clash with Manchester United, the depth of the crisis now threatening Anfield has seen Hicks plan to buy out George Gillett and refinance the Royal Bank of Scotland debt, effectively taking full control of the club.
Hicks reportedly outlined his plans to use Blackstone, a private equity firm, to refinance, but the deal could see Liverpool end up with debt far greater than Manchester United.
"It is sure to lead to extortionate interest rates, which will leave Liverpool more in hock than ever before,'' a banking source told ESPNsoccernet. ''It is a recipe for disaster for the club but it would give Hicks the time he needs to sell the club for the price he is trying to get."
The fans, though, are beginning to fear the worst for Liverpool and 'The Spirit of Shankly' fans group have seen documents which make worrying reading for the Anfield faithful.
''The Spirit of Shankly Supporters' Union have received information regarding Barclays Capital and the state of Liverpool Football Club's finances over the Summer of 2010,'' an e-mail from the group read. ''While the original copy document is not in the Union's possession, a full and accurate copy of it has been made.
''The document throws up many questions about the public messages coming from Martin Broughton, the Club and Barclays Capital underlining again that Liverpool Football Club teeters on the edge of a financial abyss.''
The group have highlighted some main points, which show the full extent of the financial situation at Liverpool, including the fact that, in the period July to August, the club's debt was increased by £20.8 million. Also, they have revealed that the sum currently required to refinance the club (£300 million) can be reduced to £187.5 million through using the proceeds of a £75 million loan to the holding company in Delaware and by rolling £37.5 million into the proposed loan for the new stadium
ESPNsoccernet understands that Liverpool's board will attempt to block Hicks' efforts to remain in control at Anfield, but could be powerless if the Texan refinances.
''If Blackstone's GSO [a specialist off-shoot that deals with companies in big financial trouble], lent Hicks the money, it is like buying a lottery ticket for Hicks,'' the source added. ''If the term is two years, or anything up to five years, he has bought that time to find a buyer at the terms he wants.
"For Liverpool it would mean bigger interest fees, bigger interest repayments, and by the end of the term, Blackstone's could end up owning the club and Hicks would have to walk away, if he cannot find a buyer.
''If Hicks extends his control by pulling off this refinancing then Liverpool will become the next Leeds United.''
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LJ la. Why cant he just FO?
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wtf is their problems?
why wanna buy out the shares when he himself; after buying out can't inject funds into anfield?! -
Originally posted by ASKL!:
wtf is their problems?
why wanna buy out the shares when he himself; after buying out can't inject funds into anfield?!
I guess the current offers or if any isn't up to his liking and he sees the potential of selling the club for higher in the next 2 yrs that is why he is prepared to incur more interest to extend his stay over there... -
LIVERPOOL NEWS
Liverpool fears grow over Hicks' takeover bid
Tom Hicks is looking to buy extra time to find a buyer for Liverpool
Liverpool fear their star players will ask to leave if Tom Hicks wins his battle to wrest back control of the club.
Hicks met Liverpool chairman Martin Broughton in London for talks last Wednesday to outline his plan to refinance through the American private equity firm Blackstone/GSO Group to give him a minimum of two more years to find a buyer.
The refinancing deal, which Hicks hopes he can conclude in advance of the Royal Bank of Scotland deadline of October 6, does not include funds to buy new players or to build a new stadium, which would conflict with the board's plea to their star players to stay at Anfield and await the arrival of new owners who will invest in the team and a £400 million new stadium.
A leading banking source close to the inside track on events told ESPNsoccernet: "If Hicks gets his way, it would be a catastrophe for Liverpool. Besides more debt, higher interest payments and no stadium, it won't be a question of selling players but whether the players will want to go.
"The players were told by the board in the summer that there would be new owners and a new stadium, and that they would not be sold.
"If the top players can see what is happening, and if it happens, they will want to go, rather than the club wanting to sell them."
The likes of Fernando Torres and Steven Gerrard had been assured during the summer that new owners were arriving and there would be funds to invest in new players. Pepe Reina recently spoke out about the need for new arrivals if the club are to become challengers again.
However, Hicks' plan would leave the Reds with far more severe problems than previously imagined.
The source added: "Up to last week when Hicks turned up with his plan, the worst-case scenario was that Liverpool would end up in mid-table without Champions League football again, but in no danger of going down, and would struggle along until the Americans went, sooner or later, and new owners would come along and rescue the club."
Liverpool's board are now deciding whether to mount a legal challenge to stop Hicks and in what form it would take. The board are short of time, with Hicks suggesting he will be in a position to refinance from the start of October as he plans to raise £281 million through GSO, an offshoot of Blackstone that specialises in lending to distressed companies.
There is, however, the hope that Hicks' plans will fall flat as the source added: "He hasn't actually raised the money yet."
