Dubai financier Amanda Staveley offers to buy Newcastle United in one-off payment of under £300 million
Owner Mike Ashley weighs chance to immediately walk away from club after second bid from consortium led by Amanda Staveley
Newcastle United owner Mike Ashley is weighing an offer for the English Premier League side which could see him walk away immediately but would mean selling for less than what he had initially hoped for when he put the club up for sale.
Dubai financier Amanda Staveley’s second offer to buy Newcastle United is at an amount below £300 million but crucially she is willing to pay this amount in one lump sum rather than in instalments, a source close to negotiations said.
When announcing his intention to sell last month, Mr Ashley had signalled he would accept payment in instalments and was said to be seeking between £350m and £400m.
Ms Staveley’s PCP Capital Partners has been in discussions with Mike Ashley, Newcastle’s owner, since then and an initial offer of £350m to be paid in instalments over a period of three years was rejected by Mr Ashley because it contained clauses that would have altered the price in the event of relegation from the Premier League.
Newcastle have a bitter experience of relegation in recent years, having gone down from the top flight twice since Mr Ashley first invested in the club in 2007. Before their last relegation, for the 2015-2016 year, the club made a profit after tax of £4m on revenue of £126m. For the period, its match day revenue was £25m, broadcasting brought in £73m, with commercial and other income at £28m.
The Daily Mail said on Tuesday that Mr Ashley was furious over media reports suggesting that the offered figure was in the region of £300m, insisting it is “way lower than that”. However, the figure is “not much lower” than £300m, a source close to the negotiations told The National on Tuesday, and the one-off payment would allow Mr Ashley to walk away free and clear immediately. PCP Capital Partners declined to comment while no one at Newcastle could be reached.
Mr Ashley has in the past said he would be willing to sell Newcastle, particularly in the wake of relegation in 2009, before taking the club off the market in the absence of any serious bid. Reports in 2013 put the figure he would be willing to accept to sell the club then at £267m, allowing him to recoup his investment which includes the £134.4m he paid to buy it outright and also interest-free loans he provided. Last month, he appeared to be committed to a sale in the wake of reported interest from the consortium led by PCP Capital Partners as well as willing to accept payment in instalments.
The investors behind the deal include both Gulf and Chinese parties. Law firm Dentons is representing Mr Ashley, however he is understood to be very much in charge of the negotiations from his side. Now there is a sense, according to the source, that if a final figure can be agreed then Mr Ashley will let go of the club and the new owners, led by Ms Staveley, will then take on all the future risk – both on and off the field.
Regardless of the final outlay required to acquire Newcastle, it is universally agreed that there is plenty of opportunity to be tapped from the growth of the Premier League, the passion of the fan base and the fact that St James’ Park is a world-class stadium, in the city centre, with a 52,000 capacity.
Former English Football Association executive Adrian Bevington said that the club has the potential to be a giant in the Premier League.
“There’s an incredible buzz about Newcastle as a football club and a football city. The growth potential there in terms of money and success both on and off the pitch,” he said.
“They’ve not won a trophy since 1969 so anyone who lands a trophy will be incredibly popular and lauded for eternity up there. Then there’s European opportunities as well, if you invest properly in a team, we’ve seen what happened in recent years with Manchester City and Chelsea.”
Ms Staveley’s consortium would be keen, it is understood, to begin to seize that opportunity as quickly as possible by wrapping up the deal to buy the club before the January transfer window opens.
However, that is looking increasingly unlikely as the parties wrangle over an initial valuation, delaying the entering of a period of exclusivity and the subsequent serious due diligence that would be required to close the sale. Tied into this is the Premier League’s Owners and Directors Test which would decide if Ms Staveley is a fit and proper person to run Newcastle. It is understood that this process takes about a month and while the ball has started rolling on it that it cannot be completed until the sale is finalised.
It is expected that there will be spending on new players in January, should the takeover happen in time.
Updated: November 22, 2017 06:58 AM