Person familiar with offer: Boston Red Sox bid to buy Liverpool, but Hicks, Gillett blockBy Rob Harris, AP
Tuesday, October 5, 2010
AP source: Red Sox bid for Liverpool
LONDON — Liverpool’s financial problems escalated Tuesday when the sagging club received a takeover bid from the Boston Red Sox’s parent company plus another offer, then announced its American owners were opposed to the offers and trying to oust two senior board members.
Co-owners Tom Hicks and George Gillett Jr. rejected the offers because the bidders are only willing to pay around 300 million pounds ($477 million), slightly more than the 218.9 million pounds (then $431 million) the pair paid for the club in 2007. But the club’s debt, which must be repaid by Oct. 15, has grown to around 285 million pounds ($453 million)
One bid is from New England Sports Ventures, which owns the Boston Red Sox, and the other is from an Asian investor, a person familiar with the situation said. He spoke on condition of anonymity because the names weren’t being publicly discussed.
Red Sox president Larry Lucchino declined comment on whether his team was involved in a bid.
Liverpool chairman Martin Broughton, managing director Christian Purslow and commercial director Ian Ayre, who also sit on the board, wanted to pursue negotiations with the bidders and are now considering legal action against Hicks and Gillett.
The owners tried to remove Purslow and Ayre, whom they both appointed to the board, the club said in a highly unusual statement revealing the debt-ridden club’s management paralysis.
“The owners have invested more than $270 million in cash into the club, and during their tenure revenues have nearly doubled, investment in players has increased and the club is one of the most profitable in the EPL,” Hicks and Gillett said in a statement. “As such, the board has been presented with offers that we believe dramatically undervalue the club.
“To be clear, there is no change in our commitment to finding a buyer for Liverpool Football Club at a fair price that reflects the very significant investment we’ve made. We will however resist any attempt to sell the club without due process or agreement by the owners.”
Hicks and Gillett were forced to put the club up for sale in April due their struggles coping with the debts resulting from their 2007 leveraged takeover.
Hicks has said he wants to sell the club for 600 million pounds ($950 million), a high valuation that has caused several investors end their interest in recent months. In addition to buying the club, the next owner will be expected to fund construction of a new stadium to replace Anfield.
The unprecedented statement provided the first public evidence of the boardroom battle that has afflicted the club for months as Hicks’ attempts to refinance the club’s debt were rejected.
“The board of directors have received two excellent financial offers to buy the club that would repay all its long-term debt,” the statement said. “A board meeting was called today to review these bids and approve a sale. Shortly prior to the meeting, the owners — Tom Hicks and George Gillett — sought to remove Managing Director Christian Purslow and Commercial Director Ian Ayre from the Board, seeking to replace them with Mack Hicks and Lori Kay McCutcheon.
“This matter is now subject to legal review and a further announcement will be made in due course,” the statement said. “Martin Broughton, Christian Purslow and Ian Ayre continue to explore every possible route to achieving a sale of the club at the earliest opportunity.”
Amid the financial turmoil, Liverpool is off to a dreadful 1-3-3 start in the Premier League, 18th among the 20 teams and in the relegation zone after losing to newly promoted Blackpool on Sunday.
Tags: Boston, Europe, London, Massachusetts, North America, Ownership Changes, Professional Baseball, Sports Business, United Kingdom, United States, Western Europe