Liverpool FC Forum

[jonnymac1979]

With the Thai deal now uncertain, do you think Morgan will try again or has he had his pride dented one too many times?  I think we could have done with him as a backer rather than the Thai deal. 

He definitely would have shook things up.  His point sounded like there was no ulterior motives.  It was simple, he wanted to give all of the money to the club because he was a fan, he wanted to put us back at the top.

Now, I don't want to sound naive, all chairmen have an agenda like that although rarely deliver and are not appreciated, but it felt that this guy meant it.

And we knocked it back!!!!!

What do you think?

[redandblue]

Morgan would be great for the club. He obviously wants a degree of control to go with his investment whih would also be great for the club.

Unlike many on this board who have congratulated David Moores for supporting Houllier through thick and thin, I am of the view that Moores is an idiot. we all know that he is not very bright and unlike Morgan who has worked hard to build his fortune, moores has not done a day's work in his life. He is totally unsuited to the role of running or chairing LFC.

[dawson99]

i am sure i heard that morgan is preparing to table another bid but i dont have a source so i guess its all hear say for now. My one reservation for morgan is the whole share scheme he is where moore will really be buying his own shares again. If he was to table a bit similar to the thai one then im sure that it would be lapped up. Local money is always appreciated more and someone like Morgan can only do good forthe club in my opinion

[Scottbot]

There were a couple of whispers in the press over the weekend saying that Morgan would likely be making a 3rd an final bid if/when the Tai deal falls through.

I doubt very much that it will be successful if it is on the same lines as the previous two. It seems to me his best bet might be to try and buys shares directly from Moores with the promise of more investment.

[REDTILLDEAD]

I think it boils down to clash of personalities, on one hand you have moores who  seems set in the  old traditional ways, He wants to remain in control of his empire. He is frightened of change too quickly, and is slow to move with the times. Then you have morgan who wants to move LFC up to that higher level, and believes that the fans should have the option of buying into the club. The one point i would like to make is morgan leans towards a "shared stadium" veiw? Which does not go down well not only with me, but also most LFC fans dont want the blue noses getting a free ride on our backs!!. 

[gaz31]

i agree with you jonnymac he's a true red and i would have loved for us to have taken his money and had his input!!!

[JBG]

I doubt we'll hear much more from Steve Morgan in the future.

[Dalglish]

If I sank a reputed 70 Odd Million into ANY organisation I'd want to have a SAY about what is being done with MY money !!!

What other part of business would it be deemed Ok to sink such vast amounts of money in for no control or say ?


Moores has history of the club weighing heavily over him , it's like a milestone around his neck. How come he doesn't take criticism so well  ? At the AGM he spoke of possibly moving aside iof it was for the betterment of LFC ........ You have to think he honestly doesn't believe 73 Million pounds of investment from this man is beneficial . But with hardly ANY communication from the club to the fans and the benefactors (thats the Paying public in case you have forgotten) the unrest and uncertainty wil only continue ....

IF he doesn't believe Morgan's money is suitable then why don't they explain why ?

[azriahmad]

I believe Morgan's bid was rejected for 2 reasons.

First, Morgan's bid is to raise all the funds for the club, and none to the existing shareholders. It has been reported somewhere that Moores has personally put in some 10 million pounds of his own personal money to part finance Houllier's purchases in the past. Under the Thai bid, Moores will sell a part of his 51% shareholding in Liverpool for some 30 million and thus stand to make some 20 million in return for relinquishing his outright majority equity stake and combined to a new share issue to the Thai party to inject some 35 million into the club's coffers, Moores will end up with roughly 30% shareholding, equal to the Thais but still remain in the driving seat in so far as the management of the club is concerned.

Morgan's bid involves an underwiritng of a proposed new share issuance of share to the existing shareholders and some 12 million pounds worth of issue to Liverpool fans. This means that the existing shareholders have to fork out money to buy the shares and failing that, Morgan's company will buy those shares to ensure that Liverpool still receive the funds but the existing shareholders will be diluted in terms of their shareholding. From Moores' point of view, he will lose out because he will have to come out with more money to retain his shareholding, or not take up the share issuance entitlement and get diluted yer he will not presonally receive anything.

Secondly, there is the clash of personality with Morgan who will surely insist on a few board seats and one of them will go to him.

Yes, at the end of the day, money talks. Morgan can increase his chances if he were to formulate an alternative proposal whereby Moores will receive more money than under the Thai bid and retain his Chairmanship and control over management. Given their history, do you realistically think that will happen? As a businessman and a hardcore fan, Morgan will want to ensure that the club gets the maximum money in preference to any existing shareholders.

[Dalglish]

Fine Post Azriahmad , stil trying to work out what you said exactly but excellent work   only kidding mate, sheds a little more light on the situation but your comments reagrding their history is perhaps more telling than any other..... Shame they can't put thier personal spats to one side in oder to bo whats best for LFC.............

[azriahmad]

Dalglish, although it has not exactly been spelt put, I can sort of pick-up something about the 2 rival proposals as my line of work involves corporate finance. I will try to clarify a little further what I was trying to say.

Liverpool FC, like other entities such as companies, are owned by their shareholders. It has not been made publically available because LFC is not a public company but I gathered there are 35,000 shares in issue and out of this Moores and his family presently own 51% or 17,850 shares. In the statement rejecting the Morgan bid, the Directors or Moores value LFC at 140 million pounds or 4,000 pounds per share.

Let's look into some information to briefly analyse the main difference between the 2 bids.

The Morgan Bid
1.  Liverpool is to undertake a rights issue of new shares to the existing shareholders to raise new capital for LFC amounting to some 61.25 million pounds. A company associated with Morgan will underwrite this rights issue, meaning that if there were no or shortage of subscribers from the existing shareholders, this company will buy up the unscubscribed shares to ensure that LFC gets to raise all of the targeted funds.

It was not made clear how many shares are to be issued but I gathered it is a 1 for 1, meaning that if you own 1 share, you are entitled to subscribe to 1 new shares in LFC at 1,750 pounds per share. Therefore 35,000 new shares would raise 61.25 million quid.

If Moores were to retain his shareholding in the enlarged LFC's paid up capital of 70,000 shares (35,000 original shares + 35,000 new shares under the rights issue), he has to fork out some 31.23 million pounds.

2.  Morgan proposes that other LFC fans will be offered some 7,000 new shares at 1,750 pounds per share to raise 12.25 million pounds, to make the total funds raised to 73.5 million, all going to LFC. Again, all of this are to be underwritten by Morgan's company.

At the end of this, LFC's enlarged paid-up capital would be 77,000 shares with Moores owning up to 35,700 shares or 46.3%. It was said that Moores's shareholding could be reduced to 35% or 26,950 shares whereby he has to buy an additional 9,100 shares at a value of 15.9 million pounds and Morgan would retain the same amount of shareholding and that Moores were to remain as Chairman but Morgan and his associates are to be given some seats on the Board.

This deal is the better one for LFC as the club stands to gae some 73.5 million pounds of funds, but Moores will get none but instead will have to fork out 15.9 million pounds.


The Thai Bid
1.  The Thais will buy some of Moores' existing shares (there is no mention of quantum), my guess is at 4,000 per share or more for 30 million pounds, all going into Moores' pocket. This will lessen his shareholding in LFC from the existing 51%.

2.  Then the Thais will subscribe to new LFC shares to raise 35 million pounds which will go into LFC's coffers.

At the end of the day, Moores and the Thais will have equal shareholding of between 35% to 30% each with Moores remaining as the Chairman and the Thais getting 2 or 3 Board seats. Moores will remain in charge of the management. He gets money to cover his personal funding of Liverpool, said to be some 10 million pounds, Liverpool gets funds (although not as much as the Morgan bid), and there is no hostile personalities like Morgan getting on the Board of Directors.

Hence the inclination towards the Thai bid. To be successful in his next bid (if there were to be any) Morgan needs to improve the cash returns to Moores or buy out Moores completely (this is unlikely as Moores indicated that Liverpool is a labour of love for him and he is nor desperate for money).

The bottom line is that Moores wants to be compensated for relinquishing his majority control, and the Thais are not at loggerheads with him. Although Morgan promised to work together, Moores will not get much from the Morgan bid as opposed to the Thai bid. Like I said, money still talks...

[JBG]

Excellent post, azriahmad.

[azriahmad]

Thank U, JBG. Coming from U it is a nice compliment.

My main concern is if the Thai Bid as accepted by the Liverpool board, will ever become a reality. Liverpool is reported to be some 19 million pounds in debt, with a cash balance of 4 million pounds. We seriously need some additional injection of funds to allow the incoming manager a decent war chest to buy new players.

The planned lottery by Taksin has been scrapped, and he is arranging an alternative method of financing. Clearly a football club is not a business where one can expect a lot of cash being paid out as dividends to the shareholders, and the Thais are eying the potentially lucrative merchandising income from the Liverpool fans in the Asian countries. If they fail to come up with the funding and the deal collapses, whare is Liverpool going to get new injection of funds?

Morgan may be tempted to make an alternative offer but it is unrealistic to expect him to make such a big pay out to Moores as he and all of the fans like us wants Liverpool to get the max funds. Unless Moores is willing to compromise and accept a lower cash return for diluting his shareholding in Liverpool (his 10 million or so advances/investment to part finance Houllier's purchases in the past with some additional amount as his "premium").

[woof woof !]

Nice one Azria, If nothing else it has confirmed my opinion that Moores is now "only in it for the money". Ok he financed Fooliers fantasies but if he no longer wants what is best for the club as opposed to himself why doesn't he "sell out and move on" . It appears that without either of the two bids tabled coming to fruition , financially we are close to some serious trouble. I'm not referring soley to the ability to bid for new players but also the ability to offer competitive wages to new and existing stars.

[azriahmad]

Woolfie, if Moores values LFC at 140 million pounds, it would take a guy like Morgan needs to fork out 71.4 million pounds just to buy out Moores, this is before counting any funds to be raised for LFC.

LFC, like most clubs with the exception of manure and Bayern Munich, is operating either at break even or most likely at a loss. More so for us as we have not had the benefit of a Champions' League run last year and the difference between a successful semi-finalist inb the Champions' League and the UEFA Cup winner is some 15 to 20 million pounds in favour of the Champions' League participant. At the same time, we still had those expensive misfits on high wages like Diouf, Smicer, Biscan et all.

Now, with such an astronomical asking price, would any sensible man, be it Morgan or anybody else, be so foolhardy to spend just to take-over from Moores? Moores should put a more realistic asking price or better still, swallow some pride and try to work on a compromise with Morgan so that LFC can be on a better footing to obtain long-term success on and off the football field.