Newcastle takeover ‘gridlock’ as buyers fail to ease doubts
The proposed takeover of Newcastle United by a Saudi Arabian-led consortium is deadlocked because of concerns over the new ownership structure and who would have the final say in the decision-making process at the club.
Current owner Mike Ashley accepted a £300million offer in April, with the expectation that the deal would be confirmed by the Premier League a few weeks later. Instead, to the consternation of Newcastle fans desperate for a change of ownership, the takeover is now into a 17th week of scrutiny under the Premier League’s owners’ and directors’ test.
In turn, Ashley has been talking to American businessman Henry Mauriss since the start of the month and it is understood he is free to sell to another buyer after the exclusivity deal with the Saudi-led consortium, which involved the payment of a deposit, expired.
Saudi Arabia’s Public Investment Fund is attempting to acquire an 80 per cent stake in Newcastle, with financier Amanda Staveley, who has brokered the deal, receiving 10 per cent and the Reuben family, represented by Jamie Reuben, buying the remaining 10 per cent.
Talks with the Premier League are now said to have stalled, with sources saying that the buyers are struggling to satisfy the organisation, which appears to want greater clarity on the link between the PIF and the Saudi state.
At the heart of the matter is the long-running legal dispute the Premier League has had with the Saudi government over illegal streaming of English football and other sporting events.
The issue was further confused recently when Saudi Arabia banned BEIN, the Qatari-based international rights holder in the Middle East, from broadcasting in the country, which means it is now impossible to legally watch Premier League matches in the kingdom.
In turn, Saudi Arabia had released statements saying it would crack down on websites, such as the pirate Beoutq, which have been illegally showing sporting events in the hope that it would convince the Premier League it was not backing the activities.
The takeover has not been officially rejected, but there is dwindling confidence that it will go through in its present form. One source told The Daily Telegraph that it was “gridlocked”.
The source added: “As things stand, there is no chance of the takeover progressing in its current form. The problem is this: the Premier League want to know who will be running the club, who will have the final say on decisions, who will negotiate sponsorship deals and so on and so on.
“The PIF has the majority stake but the management structure does not seem to recognise that. The more questions that have been asked, the more muddled and confused it becomes.
“The Premier League is not satisfied with the answers given.”
The answers so far provided by the buyers do not appear to have persuaded the Premier League that it can allow the takeover to go through as it stands. The crux of the problem appears to remain that the Premier League is unconvinced by the argument the PIF is independent of the Saudi government and is insisting on the link being made clearer.
The buyers have continued to claim that the PIF is a separate legal entity to the Saudi state, an argument apparently undermined by the fact Crown Prince Mohammed bin Salman, the country’s de facto ruler, is chairman of the fund. The PIF is understood to have continued to maintain that it is an independent investment vehicle.
It is understood that Staveley would be in day-to-day charge of the business. Three-fifths of the board would be made up of Saudi representatives. Jamie Reuben would also be on the board.
Owen Brown, an adviser and friend of former Newcastle manager Rafael Benitez, has also been involved in meetings.
It is understood the structure was designed to put some distance between the club and the government officials on the PIF board.
Rather than serious concerns over Saudi Arabia’s human rights record, it has been the issue of piracy that has complicated the deal.
Nine attempts to take legal action by the Premier League were blocked in Saudi Arabia before the takeover bid was launched, while a report by the World Trade Organisation ruled the Saudi Arabia government had facilitated and promoted the illegal streaming. When contacted by The Telegraph, the Premier League refused to deny claims the takeover talks had reached an impasse, before replying with a “no comment” to additional questions about whether it intended to block it.