Hicks and Gillett set to lose Liverpool stand-off
The board of England's most successful football team said on Wednesday it had agreed to sell up to the owners of baseball's Boston Red Sox, despite the best efforts of the current owners to keep hold of the Merseyside club.
Corporate lawyers believe owners Tom Hicks and George Gillett could try to negotiate a slightly higher fee, but they are likely to ultimately lose control because an October 15 deadline looms for a refinancing of the debt on the club.
Terms between the owners and major creditor, the Royal Bank of Scotland (RBS), are not known but lawyers and analysts said RBS could then take control of the club and conduct a sale if the owners have not refinanced.
As part of the stand-off, Hicks and Gillett have threatened legal action over their push to sack members of the board.
In return, RBS can threaten to put the club into administration, although that would be hugely unpopular politically and with those who run the English game.
GAME OF BRINKMANSHIP
A club going into administration can be deducted nine points although the Premier League is unlikely to want to penalise a club of Liverpool's stature.
They are stuck in the relegation zone having picked up just six points from their first seven games.
"The sellers have got the opportunity to play a game of brinkmanship and they might well try it," Paul Voller, a companies and commercial partner at law firm Bircham Dyson Bell, told Reuters.
"But I think the most likely outcome is a conventional sale, I think they will eventually succumb to the pressure."
Hicks and Gillett bought the Merseyside club in February 2007 for 218.9 million pounds and have become increasingly unpopular with the fans for burdening it with debt and leaving little money in the transfer pot to buy new players.
That situation has intensified this season with the side making their worst start for more than half a century.
The five-times European champions owe about 237 million pounds mainly to RBS and the proposed sale price of 300 million pounds from New England Sports Ventures (NESV) would cover the debt, fees, working capital and maybe leave a small amount for the two owners.
Danny Davis, a partner at Mishcon de Reya, told Reuters the owners should accept the offer because it is the best option they can hope for.
"The bank is in a strong position and will use this to force a deal one way or another. RBS will get its money back," he said, adding that RBS could impose a late payment fee of tens of millions of pounds.
Stephen Ridgway, an associate in the sports division at SNR Denton, told Reuters Hicks and Gillett would likely accuse the other three board members of failing to act in the best interests of the club by accepting what they say is a low offer.
Local media had reported that the two owners were looking for about 600 million pounds for the club. "I think (the three directors) would probably say the best interests of the club at the moment are to realise value through selling it in an orderly fashion prior to any administration and that this was the best offer," he said.
Voller agreed the three directors - Martin Broughton, the chairman, Christian Purslow, managing director, and Ian Ayre, the commercial director - must have been confident in their position before they went public with accepting an offer.
"The stakes are very high and I would expect Liverpool's directors to have taken some kind of risk but I reckon they must be confident in what they have done," he said.
A source familiar with the matter told Reuters that RBS backed the sale for 300 million pounds but the lawyers cautioned that the bank, part nationalised, must be seen to be acting fairly and extracting the correct price.