THE DEALMAKER
Is a Toon sale inching nearer?
THE Newcastle United takeover saga took another twist on Sunday with the presence of Amanda Staveley at St James’ Park off the back of fresh reports over the weekend about mounting interest in the club.
So what is actually happening? And where does the takeover actually stand? With scepticism about Mike Ashley’s motives and the presence of several of his close confidantes at the club now, many feel it is another case of him allowing a fog of confusion to cover the club.
But it does feel different. Here are some of the big issues surrounding the takeover – and what we know about them:
DOES MIKE ASHLEY WANT TO SELL NEWCASTLE UNITED?
It’s the £380million question and of course we have been here before with the Sports Direct tycoon.
He has put the club up for sale twice during his United tenure but both of those times were nearly a decade ago and the circumstances were very different when he made attempts to offload the club following Kevin Keegan’s resignation and the subsequent relegation to the Championship in 2009.
It feels very different this time around. Since 2009, Ashley has denied the club is up for sale and the Magpies would quickly respond to reports saying anything different with forthright denials – but those denials have dried up over recent sale reports.
The Sky Sports story at the start of the summer claiming “advanced interest” from China was understood to have come from intermediaries looking to flush out interest in Newcastle at a time when the value was at its highest.
The club did not speak on the record but it’s understood Ashley had no issue with the reports.
And, of course, we have the words of the man himself.
Although things aren’t always straightforward with the Newcastle owner, he is on the record very recently as saying he is open to offers.
The presence of his lawyer Justin Barnes at the club – he is now a key member of the hierarchy – is another sign Newcastle are being prepared for a sale. He has worked on acquisitions and sales for Ashley in the past: his re-assignment to St James’ Park is widely understood to be for this very reason.
None of this means he will be an easy seller. He feels he’s in the driving seat and won’t sell
on the cheap. And he may want to retain a stake in the club, not least because its seen as an important vehicle for his Sports Direct brand. That would complicate matters. WHAT IS THE PRICE HE’S LOOKING FOR?
Initial reports suggested £450million was the price Newcastle’s owner was looking for. Wellbriefed reports in The Times last week suggested the price had been knocked down to £380million.
To put that into context, it would be the most expensive takeover in British football since Manchester United were bought by the Glazers in a leveraged buy-out.
It’s not known whether that would be for a majority stake, 100% of the club or even a minority stake – but Ashley is open to all of those things.
Recent takeovers have been more modest and none have broken through the £300million barrier.
Chinese businessman Jisheng Gao paid £210million for an 80% stake in Southampton and Manchester City sold a 13% stake to a Chinese consortium for £265million in
2015.
IS ANYONE ACTUALLY INTERESTED IN NEWCASTLE?
Yes – there is plenty of interest in Newcastle and United have been contacted by intermediaries working on behalf of consortia in recent months. They come from all over the world – China, the Middle East and American firms have all shown interest. Within 48 hours of the initial reports that Newcastle was up for sale, groups in China were expressing interest. Alexander Jarvis, chairman of Blackbridge Cross Borders – a company that has advised on several potential Chinese takeovers and tried to broker a deal for Middlesbrough last year – said there is interest in Asia. “I have been contacted by two groups from Shenzhen since news that Newcastle are available came out on Monday,” he said.
“This is a bit of a fishing trip from Newcastle: trying to find out whether there is interest from China and there is definitely global interest in Newcastle.
“The price that is being put around is a high one, but Mike Ashley will feel he can get that sort of money for it. There are serious people who are still interested in Premier League football and it’s not quite as complicated as people in England sometimes think.
“There is interest in Newcastle in Asia – it has a fanbase in Hong Kong, Malaysia, China. And of course they have a world-class manager in Rafa Benitez and Premier League football, which makes them appeal.”
The thing is, there has always been interest in buying Newcastle from Ashley. But these kind of deals attract plenty of hangers-on and tyre kickers. The crucial part is taking interest from serious businesspeople to the next level – which is something Newcastle haven’t yet done.
SO HOW CLOSE IS IT?
All the signs are that we are some way away from Ashley actually relinquishing control. There have been talks with interested parties but no concrete offers yet.
It feels like it’s still some way off – although one source close to the proceedings reckoned it was the start of a “long goodbye” from Ashley. Whether that means months or even years is not clear – but it feels like the former rather than the latter this time.
The one development of note is that several interested parties have now signed nondisclosure agreements (NDA). This means that the potential investors are being granted access to confidential business information that they are prohibited by law from sharing with third parties (most notably the media).
HOW SIGNIFICANT IS IT THAT NON-DISCLOSURE AGREEMENTS HAVE BEEN SIGNED?
This is a step up from merely talking about a deal and is intended to see how serious either party is about a sale. It has happened at football clubs before and led to nothing. But it’s a sign interest is serious.
COULD IT ALL BE HYPE?
Scepticism about Ashley’s motives, Newcastle’s future direction and the way the club tries to guide the narrative have led many to doubt what’s being reported about the takeover. And you have to say the sceptical ones have usually been proved right when it comes to Ashley.
Newcastle’s geographical position, price and the difficulty of actually dealing with Ashley (previously interested parties have spoken of him or his team moving the goalposts during discussions) mean it could be a protracted process.
But when I reported on Friday there was one group who had signed an NDA, it did not come from the club. The club were also keen to point out that last week’s reports in the Times about Ashley lowering his price did not come from them.
WAS THE PRESENCE OF AMANDA STAVELEY SIGNIFICANT?
It depends what you view as significant. Staveley is a financier who works with very rich Middle East businessmen on acquisitions – and she’s let it be known that she is looking to get involved in Premier League football.
She wanted to broker a takeover for Liverpool – the club she supports – and has made two attempts to do so.
The club said that yesterday’s visit was because she wanted to take the Reds game in and is friends with Liverpool legend Kenny Dalglish and stressed there were no talks with anyone at Newcastle about a takeover planned. She’s not actively engaged in anything with regards to United at the moment.
But it did feel as if it may be the catalyst for something. For a start, she was walked down the players’ tunnel by someone with Newcastle links who is close to Benitez.
And there was technicolour proof for her on Sunday of Newcastle’s potential: a full crowd, a fantastic atmosphere and a world-class manager are exactly the kind of ingredients that someone looking to buy into a club with potential would be interested in.
She was accompanied by David Bick, a “seasoned PR man” who is also a football finance operative and was reported last year to be in the “throes of several football takeovers”.
SO WHAT IS JUSTIN BARNES ACTUALLY DOING AT NEWCASTLE?
That was one of 13 as yet unanswered questions the Chronicle put to the club.
Barnes is an abrasive lawyer who is now working alongside managing director Lee Charnley and is keeping a tight rein on spending at the club. It would be helpful to know who has the final say on club matters now: him or Charnley.
What is certain is that his presence was a significant complicating factor in both of the last two transfer windows according to club sources. If United are in a process of cost controlling to prepare for a buyer, he is the man driving that agenda. The fact someone wielding such power and influence at the club has never been officially acknowledged by them is problematic. But if it’s a means to an end – and the end is selling the club – it may be worth it.
AND HOW ABOUT KEITH BISHOP?
Bishop is Ashley’s personal public relations man who advises him on Newcastle matters. He has been at every Benitez press conference since the transfer window, but he’s hardly a new face at Newcastle, having been around since the Alan Pardew era.
WHAT DOES RAFA BENITEZ MAKE OF IT ALL?
He was asked by Sky whether he knew anything of the takeover rumours and replied – with a wry smile. “In the last 90 minutes? I was just focusing on the noise.”
He’s been kept fairly well briefed by Ashley all the way along in the process. It’s understood the investment plan was mentioned at the May transfer summit which ultimately led to tensions between manager and owner. Any takeover which gives the club access to greater transfer funds would – in theory – aid him.
But it’s not a given that any new owners would want him. They might want their own man, although given the Spaniard’s popularity at St James’ Park that would be shooting themselves in the foot from the off.
It was suggested to me that his presence in the dugout was a significant motivating factor for some of the prospective buyers. Benitez has a big profile and certainly enhances the club’s reputation by being associated with them.
HOW WOULD A TAKEOVER ACTUALLY HAPPEN?
When Ashley took over at Newcastle it happened quickly. When he unsuccessfully tried to sell, there were an interminable number of “interested parties” who emerged in the media but came to nothing. On reflection, that was never going to work.
The fact no named bidder has emerged yet is probably a good sign: serious characters are unlikely to play their hand if they’ve got realistic aspirations of taking over.
What might happen is a new company might be formed specifically to buy the club. Ashley set up St James’ Holdings Ltd to buy Newcastle – so any new group registered at Companies House with a United-themed name might pique interest.
First of all, the two parties have got to edge closer to a deal that works for them. In the Guardian in 2015, economists David Sally and Chris Anderson wrote about the process. “Successful deals require a so-called zone of possible agreement (zopa) – a positive overlap between the buyer’s willingness to pay and the seller’s walkaway price,” they wrote.
In recent years that has been difficult. “We suspect that market conditions in recent years have made it harder for buyers and sellers to identify agreement, and that two factors – exploding media revenues coupled with uncertain profitability – have caused a widespread negative zopa as seller’s expectations have zoomed skyward and potential buyers have hesitated to follow,” they wrote.
But it could be that era is coming to an end with China entering the market.