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FootballNewsLiverpool’s owners ‘not interested’ in £120m Rhone bid for 40 per cent stake

Liverpool’s owners ‘not interested’ in £120m Rhone bid for 40 per cent stake


By Nick Harris

14 March 2010

Liverpool’s co-owners Tom Hicks and George Gillett are not interested in selling 40 per cent of Liverpool for as little as £120m at the moment, sportingintelligence has been told by a well-placed source today, and this suggests that no quick deal is on the cards following interest from a private equity firm, the Rhone Group.

A report in the News of the World this morning said the American firm has tabled an offer of £100m for a 40 per cent stake, while sources close to Anfield have suggested the offer could be slightly higher (around £120m) for a similar portion of the club.

Hicks and Gillett need to raise £100m by the summer to repay part of their debts of £237m to RBS bank. The search for new money is being co-ordinated by Liverpool’s managing director, Christian Purslow, in association with bankers Rothschild. But while that search is becoming more urgent by the day, the American owners are not ready yet to hand over such a big chunk of the club for the sums reportedly on offer from Rhone.

A source told sportingintelligence today: “It’s a very dangerous conclusion that [Hicks and Gillett] will accept an offer like that. That’s a bad assumption to make . . . It’s highly unlikely that [they’d] be interested in an offer at that level.”

In a twist to the tale, sportingintelligence understands that the American owners had not been informed of the detail of the Rhone offer before it became public knowledge via the Press. This may be explained by the fact that it was only tabled within the past couple of days. But it is curious that it leaked if it is a serious attempt by Rhone to seize a chunk of Liverpool.

Serious bidders tend to act in serious secrecy; and serious bidders would not expect anyone close to Anfield to be confirming their identity and even rough details of their offer before a deal was pretty much done. And the Rhone deal is far from done while Gillett and Hicks think the offer is too low and don’t even know all the specifics.

Arguably the most positive aspect of the Rhone publicity for Liverpool is it might flush out other interest.

The Rhone Group has offices in New York, London and Paris but has no track record in football. The company describes itself as “one of the world’s leading mid-market private-equity firms”.

As sportingintelligence reported last week, the hunt for money has attracted some interest, but until Rhone’s interest in the last few days, other parties have been waiting to see whether Liverpool qualify for next season’s Champions League before making a move. Qualification (or not) will make a difference to the incumbent owners’ ability to hang on to some or all of the club.

The details of the Rhone bid that have leaked out prompt more questions than answers about how day-to-day control of the club would run in a Rhone-Hicks-Gillett partnership. It is suggested that Rhone would take a 40 per cent stake or thereabouts (and no less than 34 per cent), leaving Hicks and Gillett with 30 per cent each (or 33 per cent).

That would not, on the face of it, seem a satisfactory situation, as nobody would have outright control. And given that Hicks and Gillett don’t have a lot of money, if any, to pour into the club, it assumes the Rhone Group will do that, and potentially hand a long-term upside to Hicks and Gillett in the process. Which begs the question: Why would they do that?


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