Exclusivity period ‘disappoints’ rival bidder for club
ACOMPANY proposing to buy Rochdale AFC says it’s ‘disappointed’ after the football club announced it had entered into a ‘period of exclusivity’ with a rival bidder.
They said there hasn’t been ‘an open, full, and fair process’ around the move and called for ‘a fair evaluation process for all bids’.
The Football Club LLC (TFC), a group headed by businessmen Justin Corrado and David Dwyer, signed a letter of intent to buy the Spotland club last week. It followed a crunch vote in which shareholders voted to dilute their holdings in order to create nine million new shares.
TFC are the second company to publicly reveal a bid for the National League club, after Texas-based World Soccer Holdings also signed a letter of intent.
It was announced on Tuesday, however, that the club has entered a ‘period of exclusivity’ with the US firm over a potential deal.
Mr Corrado, managing partner of TFC, has now released a statement and the contents of its letter of intent in full, which says £1.6m would be offered as soon as any deal with it is agreed. Both are published on its website.
In the statement released on Tuesday, TFC said: “We were disappointed to hear today that the chairman has elected to enter a period of exclusivity without an open, full, and fair process. We believe it’s crucial for both supporters and shareholders to be fully informed about the future of their club. Given the numerous questions surrounding this issue, we want to provide as much clarity as possible based on the information available to us.”
The group said it had ‘not yet received any feedback’ on its letter of intent (LOI) from the club or ‘been given an opportunity to respond to the opposing bid’. It said club chairman, Simon Gauge, had cancelled a meeting planned for Wednesday.
“We believe that both LOIS as submitted should be made transparent to shareholders so they can assess what each bid offers,” added the statement.
“We’ve been engaged in discussions with the club for over two months while working on a long-term business plan that could provide financial stability and additional revenues.
“We had a meeting scheduled with Simon for this coming Wednesday to further discuss our plans and thoughts regarding the club’s future. However, Simon unexpectedly cancelled this meeting on Saturday.
“We advocate for a fair evaluation process for all bids.
If another bid ultimately proves to be more beneficial for the club, we will fully support the decision to choose that bid.”
Mr Gauge has previously warned the 117-year-old club could fold if a new investor was not found by the end of this month.
In a statement on its website, the club said: “Rochdale AFC can confirm that it has entered into a short period of exclusivity with World Soccer Holdings LLC. This period of exclusivity is in relation to the proposed acquisition of the newly created shares in the club, following the recent EGM. Further updates will follow in due course, and the club will endeavour to keep all stakeholders up to date during this period.”
World Soccer Holdings already owns a sizeable chunk of MVV Maastricht, a club currently sitting in mid-table in Holland’s second division. Previously WSH had been rumoured to take over at another Dutch second division side, ADO Den Hag, but no deal was done.
The Rochdale Observer has contacted the club for comment on the contents of TFC’S statement and its LOI.
TFC has published its letter of intent, date March 3, in full on its website. It says:
Dear
Gauge,
We are writing to provide a letter of intent from The Football Club LLC (TFC) in respect of a transaction with Rochdale AFC (RAFC).
The upcoming EGM vote is politically and emotionally charged. We do not want to add any confusion to the proceedings and feel the club’s stakeholders should decide the future of the club without us impacting the vote.
Therefore, we ask that our submission be kept confidential until after the vote is made by the shareholders and fans at the EGM on 7 March 2024.
However, there is one exception to this request: you are permitted to forward this Letter of Intent (LOI) to George Brigham prior to that date. We also request that George Brigham keep this LOI confidential.
We appreciate your hospitality in our February 2024 visit as well as the time, effort, and energy that you and other local community leaders have afforded us. Working with you over the past 3 months to develop our plan has been exciting and deeply fulfilling for us on both a personal and professional level.
Our plan is to provide a capital infusion into the
Mr. club to cover the next four years of projected deficits while establishing a revenue stream through the commercial development of the club’s grounds. This would be done in such a way as to protect the pitch, stands, and football/ rugby spaces. The commercial center would provide the club with longterm stability.
This plan is contingent upon a positive opinion from the Borough Council Planning and Development Department. Our intent is to receive that opinion in March 2024. We note this to be completely transparent. The other bid appears to rely on a commercial real estate development plan as well; we anticipate that the other plan would also need such an opinion in order to move forward.
Our ownership group includes professionals with expertise in property development, tech entrepreneurship, data science, business development, law, finance, marketing, logistics, and more. It is led by two passionate footballers, one of whom grew up in and lives in Lancashire. Most of us are eager to contribute our skills free of charge.
We will strive to ensure that the history and traditions of RAFC are maintained for future generations of fans. We are fully committed to the success of Rochdale AFC. We do not have a multi-club strategy. We have a Rochdale AFC strategy.
Transaction Overview and Structure
Based on our preliminary review of your football club, TFC is pleased to submit this non-binding letter of intent for a transaction with RAFC. We have shown proof of funds to demonstrate our ability to complete this transaction.
This proposal is based on the pending restructuring of the club’s share structure at the March 7th EGM which would issue 9,000,000 new shares of the club, increasing the total club shares to 10,000,000. We propose purchasing 80% of the equity of RAFC, including all assets and liabilities.
We believe that for this transaction to be successful our interests must be aligned. With that in mind, we are proposing a structure that allows all parties to benefit from our future success in an equitable way.
Subject to alignment on definitive documents and completion of customary diligence, we are offering the following:
£1,600,000 at closing, with the use of proceeds to be put towards the operation of the football club.
TFC receives 80% of all RAFC shares on a fully diluted basis, issued upon closing and not subject to any vesting period.
As a gesture of goodwill to the Rochdale community, TFC will transfer 5% of all shares on a fully diluted basis to The Dale Trust to help restore their ownership stake in RAFC (this would leave TFC’S share total at 75% of all shares).
£220,000 of Simon Gauge’s debt will be converted to equity representing 10% of the fully diluted shares of RAFC. We would like to discuss how to handle the remainder of Simon’s debt.
It is our understanding the Borough Council has been open to deferring their debt for 5-7 years.
This is a course of action we intend to explore. We look forward to working with you to develop the process by which these competing bids will be assessed.