collapse. This from The Guardian.
LEFT ON THE SHELF
collapse. This from The Guardian.
The proposed £25m deal to sell Leeds to a transatlantic consortium was on the
brink of collapse last night, with a rival group headed by the property developer Norman Stubbs ready to pick up the pieces.
brink of collapse last night, with a rival group headed by the property developer Norman Stubbs ready to pick up the pieces.
Bankers for the US-based Nova Financial Partners consortium, headed by
Sebastian Sainsbury, refused to authorise a transfer of funds to the Leeds board which would have allowed the takeover to go through before today's 1pm deadline.
Sebastian Sainsbury, refused to authorise a transfer of funds to the Leeds board which would have allowed the takeover to go through before today's 1pm deadline.
There were claims that the problem was down to a stumbling block over due
diligence. It is understood that the sticking point was the ownership of an option to buy back Leeds's Thorp Arch training ground which was sold for a reported
£4.2m last month then leased back to the club.
diligence. It is understood that the sticking point was the ownership of an option to buy back Leeds's Thorp Arch training ground which was sold for a reported
£4.2m last month then leased back to the club.
That has proved to be a problem for the consortium, who feared that the freehold on Thorp Arch would not be included as part of the deal. However, with both parties having signed a non-disclosure agreement after the consortium delivered of proof of funds to buy the club this week, neither was prepared to confirm the apparent gravity of the breakdown.
None the less, the delay is set to shatter negotiations. A minimum loan
repayment of £2.75m must be paid today to Jack Petchey, the former Watford
chairman who loaned Leeds £15m in March through his investment vehicle
Trefick.
That money was used to buy Leeds by Adulant Force, the company which makes up the current board. However, the quarterly repayments must be met or a 70% premium could be added to the interest payments. Without the money from Nova Financial Partners, Leeds' must urgently seek alternative sources of revenue. The club is more than £30m in debt.
Leeds' board maintain that Nova's bid will be the 14th attempt to takeover the
club since March.
The board will most likely be forced into the immediate sale and leaseback of the Elland Road stadium to one of the Manchester-based property developer's Jacob Adler's companies. It was his firm, Barnaway, that purchased Thorp Arch and he is again poised to inject capital into the club.