Liverpool FC Forum

[hawkmoon269]

Buyers plan to sell Liverpool in seven years

By Mihir Bose
Last Updated: 11:44pm GMT 26/12/2006

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Liverpool, who are being bought by an investment company effectively owned by the Dubai government, could be sold again in seven years' time, according to a confidential document seen by The Daily Telegraph.

The document also reveals that Dubai International Capital are planning to borrow up to £300 million to finance their £450m purchase of the club.

DIC see their investment in Liverpool as purely a business deal built round the new stadium Liverpool are planning at Stanley Park. When they sell in seven years' time they are hoping to make a huge profit, providing a return of around 25 per cent on their investment for every year of ownership. There appear to be no plans to invest in new players.

Furthermore, DIC will not be the sole owners of Liverpool, unlike Roman Abramovich at Chelsea, the Glazers at Manchester United and Randy Lerner at Aston Villa. Although their deal to buy Liverpool is not yet signed and sealed, they are already looking for other investors to join them in a partnership. I understand that 30 per cent of the 90 per cent stake DIC are bidding for is being offered to City investors.


The seven-page document, which outlines the investment rationale, has been circulated to major City investors to attract them to join the consortium.

DIC have said little about why they want to buy Liverpool, but with the company ultimately owned by the fabulously wealthy Al Maktoum family, who are the ruling family of Dubai, the purchase has been seen as Liverpool's equivalent of Abramovich arriving at Chelsea, the investor with deep pockets that all football clubs crave.

Indeed, that is the reason David Moores, the chairman of Liverpool, gave for choosing DIC over George Gillett, the American who owns the Montreal Canadiens ice hockey team and is very keen to buy Liverpool.

However, anyone reading the document can have no doubt that this is purely an investment decision. And with DIC seeking partners, there is also no knowing who else will be in the Liverpool boardroom.

The great investment opportunities that Liverpool provide, as DIC see it, are set out in a section entitled "The Opportunity". The document says: "Opportunities exist to boost returns by unlocking 'hidden' value. We believe there is potential for multiple arbitrage if real estate/leisure is developed on the current Anfield site. Such an investment would allow the Middle East region to leverage on a strong brand with an equally strong international fan base."

The document tells potential investors that over the next five years a return starting at 19.3 per cent could rise to 29 per cent in year five.

One of the most revealing insights is when the document talks of how the financing will be done. A whole page is devoted to it and shows that three banks – Bank of Ireland, RBS and Bank of America – have been approached, with Bank of America the favourite.

It is clear that the new stadium is at the heart of this deal. The budget for the stadium is £240m; Liverpool want a fixed-price contract like Wembley and want penalties of £950,000 per week if the contractor is late.

The DIC document notes that the stadium, which will seat 61,000, will cost less per seat than Arsenal's Emirates Stadium. The document also provides a wonderful insight into DIC's thinking but is very different from the fans' expectations about this purchase – and would have been very different from the purchase of the club by Gillett.




Maybe this deal isn't the golden goose we all thought it was!!!

[Smeg]

bollovds

[112-1077774096]

guys, it is common practice for wealthy people to borrow money. most millionaires have mortgages on their property.

think about it, if you have your millions in an investment returning 7 or 8% per year, and you can borrow money at 5 or 6% per year, it makes sense to borrow the money and leave your money where it is gaining you higher interest, its simple economics.

we all knew that he wanted us as an investment and he wanted us to make a profit, you dont get to be the 5th richest guy in the world by making mistakes too taking too many risks.

i dont think this is too much to worry about to be honest, the guy isnt a crook, he doesnt want us as a tax haven etc, he want us run as a solid business that returns a profit, and like any business if you need more machinery to help turn a profit then you go out and buy it, and so what if we will become a brand name in the middle east, more income for the club.

please dont think we will get a new owner who isnt interested in a return from his investments, this guy is one of the most astute investors in the world hence his wealth so stop worrying, of course he wants a return, and if he wants to tie up with other investors then so be it, so what if he wants to make shares available.

also i doubt very much i this reporter has seen any financial report, the section where he says about the three banks being approached about the financing of the club "AND A WHOLE PAGE BEING DEVOTED TO IT" made me chuckle, wow a whole page in a deal worth 450 million quid, haha. i have seen 500 page reports for much smaller investment, i used to write 100 page reports for my clients wo were investing much less.

dont give too much credence to this report, if its true its not a bad thing, if its false the we also dont have to worry.

[A.B.]

guys, it is common practice for wealthy people to borrow money. most millionaires have mortgages on their property.

think about it, if you have your millions in an investment returning 7 or 8% per year, and you can borrow money at 5 or 6% per year, it makes sense to borrow the money and leave your money where it is gaining you higher interest, its simple economics.

we all knew that he wanted us as an investment and he wanted us to make a profit, you dont get to be the 5th richest guy in the world by making mistakes too taking too many risks.

i dont think this is too much to worry about to be honest, the guy isnt a crook, he doesnt want us as a tax haven etc, he want us run as a solid business that returns a profit, and like any business if you need more machinery to help turn a profit then you go out and buy it, and so what if we will become a brand name in the middle east, more income for the club.

please dont think we will get a new owner who isnt interested in a return from his investments, this guy is one of the most astute investors in the world hence his wealth so stop worrying, of course he wants a return, and if he wants to tie up with other investors then so be it, so what if he wants to make shares available.

also i doubt very much i this reporter has seen any financial report, the section where he says about the three banks being approached about the financing of the club "AND A WHOLE PAGE BEING DEVOTED TO IT" made me chuckle, wow a whole page in a deal worth 450 million quid, haha. i have seen 500 page reports for much smaller investment, i used to write 100 page reports for my clients wo were investing much less.

dont give too much credence to this report, if its true its not a bad thing, if its false the we also dont have to worry.

Good post, now all we need is you to post this on all Liverpool forums 

[tubby]

Still the notion that we will simply be sold on at a later date doesnt do much to help confidence.

[Ronny]

I wouldn't worry about being sold, once you are marketed and reaping the rewards from globalisation, you're club will be untouchable in the transfer window and financial setting

[Scott P]

Too say we are being sold in 7 years is far too precise!! How long have we been looking for investors for now?

[ivor_the_injun]

Ridiculous article, misrepresenting the facts pretty appallingly.

They aren't planning to buy the club and then sell it on 7 years down the line - the "facts" supporting this statement seem to me to be a commentary to a bar chart. It would be far more accurate if it read:

"The document states that if - for example - the club was resold after 7 years, investors would stand to make a 25% profit on their investment for every year of ownership".

THE RELEVANT SECTION IS AN EYE-CATCHING EXAMPLE FOR INVESTORS TO GET AN IDEA OF THE SORT OF RETURNS THEY CAN EXPECT. If anyone believes for one second that a company making 25% return on their investments will just cash in as opposed to keeping that stream of income going for themselves, they are f*cking nuts.

As for there being no plans for investment in new players, that too is horsesh*t. That's not the point of the document. The stadium will have, hopefully, a fixed cost for construction, and then fixed costs for punters to get a ticket for a seat. Those are predictable costs.

Can you imagine a document of this kind factoring in the purchase and sale of players?

Yeah, cos we all remember the document of a few years ago...

"Liverpool Football Club, with your help, will spend £12m on Djibril Cisse. After he does nothing for a few years, we'll loan him out to another club, after he breaks his leg in the run up to the World Cup, and later take a couple of mill just so we don't look too stupid".

Players cannot and will not be dealt with in the same terms as, say, a brick building. They're far too unpredictable. I'm frankly stunned that this has made it into a report in a "quality" newspaper as so-called evidence that DiC don't plan to provide money for new players. That is so not what the point of the document is.

All the Telegraph sub-editors on holiday, I take it?

[A.B.]

ICLiverpool

Dubai investors deny exit strategy

Dec 27 2006



Dubai International Capital, the investment company behind the proposed takeover of Liverpool, insist they have a long-term strategy in place for the club including significant funds for new players.

The company have responded to reports in Wednesday's Daily Telegraph that they plan to sell the club in 2014 having first made a huge profit from what the newspaper described as "purely a business deal".

A DIC source sought to assure Liverpool fans that were the takeover to be concluded there would be "the best possible" financial support for boss Rafael Benitez. They said: "What DIC is doing is planning to make sure that, if a deal is done, Liverpool has the best possible funding in place going forward under DIC stewardship."

"This is particularly important as we would need to get on with the stadium early in 2007 and it takes time to sort out the necessary financing," the source added.

"This is also important in terms of making sure cash is available for the ongoing strengthening of the playing squad.

"Should DIC acquire the club, Liverpool will be well run, both on and off the pitch, and we are currently laying the groundwork to ensure that will be the case."

But DIC officials have pointed out they are yet to successfully conclude their takeover of the club and that, as a result, talk of plans to sell it off for profit are premature.

The source said: "DIC has not yet formally made an offer, never mind completed a deal. Certainly there are no plans to exit an acquisition we have not even bought yet.

"It (DIC) is a very serious investor with considerable resources at its disposal and the ability to take a long-term view.

"Equally, we believe that we understand the responsibilities that come with owning Liverpool Football Club. DIC has made it clear that, should a deal be concluded, it would not interfere in the day-to-day running of the club."

[Sabre]

If they do harm to Liverpool, I'll ask british citizenship, join the royal army and invade their country. This is not oil what we're talking about, this is LFC, if anyone deals with LFC must be for the good of the institution. I hope it's .

[A.B.]

If they do harm to Liverpool, I'll ask british citizenship, join the royal army and invade their country. This is not oil what we're talking about, this is LFC, if anyone deals with LFC must be for the good of the institution. I hope it's .

It is, read the article above Steve Bruce. 

[Dundalk]

The investment company interested in a takeover of Liverpool has dismissed allegations it plans to sell the club in 2014 after making a huge profit.

The claim against Dubai International Capital was made in an article in the Daily Telegraph and it also said funds for new players would not be available.

But a DIC source said: "DIC has not yet formally made an offer, never mind completed a deal.

"Certainly there are no plans to exit an acquisition not even yet bought."

The source added: "It (DIC) is a very serious investor with considerable resources at its disposal and the ability to take a long-term view.

"Equally, we believe that we understand the responsibilities that come with owning Liverpool Football Club.

"DIC has made it clear that, should a deal be concluded, it would not interfere in the day-to-day running of the club."

The takeover by DIC, an investment arm of Dubai's government, is supposed to be worth £450m and is expected to include £200m to build a new 60,000-capacity stadium.

"What DIC is doing is planning to make sure that, if a deal is done, Liverpool has the best possible funding in place going forward under DIC stewardship," said the source.

"This is particularly important as we would need to get on with the stadium early in 2007 and it takes time to sort out the necessary financing.

"This is also important in terms of making sure cash is available for the ongoing strengthening of the playing squad.

"Should DIC acquire the club, Liverpool will be well run, both on and off the pitch, and we are currently laying the groundwork to ensure that will be the case."

[redmikey]

people who can't read shouldn't be allowed to post,  damn the internet

[RUSHIE#9]

Again the gutter press (and I mean anything that comes out of London   ) is just trying to stir up things for LFC. As the big DIC says they ain't even finalised their offer for the club let alone made any concrete plans for what their strategy is going to be for it. I would also doubt that David Moores and Rick Parry would enter into a deal with these investors if they had any inkling of bad intentions towards LFC.

Lets just wait and see what happens with the deal first before getting our knickers in a twist.

[alxy]

I read that part too where they were denying selling us off in 2014. But what was more interesting was another part where it stated that Henry might be coming to Liverpool. Stranger things have happened. Don't think Wenger would sell him off, especially to another Premiership rival like us. But then again, didn't think he would sell off Vieira too. With Arsenal playing well now without Henry, it might just convince Wenger that he can do without Henry. Would love to see Henry with us. That could truly be the missing link to our 19th title....