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Posts Tagged ‘huang’

• Chinese investor loses patience with drawn-out process
• Anfield insiders claim decision could be negotiating tactic

Kenny Huang last night informed Martin Broughton, the chairman of Liverpool, that he was breaking off talks regarding a takeover of the club, with one individual close to the Chinese investor’s consortium privately revealing that Huang had received leaked intelligence from within the sale process that his was perceived to be the only viable bid under consideration.

It is a point the board disputes, but that belief, coupled with his frustrations at the pace of progress in negotiations, led to his withdrawal . A statement on behalf of Huang announced: “After due consideration, Kenny Huang and QSL Sports is [sic] withdrawing from the ongoing sales process with respect to Liverpool. Mr. Huang has formally notified the chairman of the Liverpool board.”

Yet, in a hint typical of the smoke-and-mirrors process to sell Liverpool, Huang indicated his decision is not necessarily final, and even those involved in selling the club conceded his announcement could be a negotiating tactic. “I am now considering my future options and will be making no further comment at this time,” he added in his statement.

Huang’s perception that his consortium was the only to have made a credible proposal is something the board has disputed throughout. The Liverpool chief executive, Christian Purslow, stated on Sunday that there were five bids on the table. Even following Huang’s withdrawal, there were still indications from those involved in the sale process that there remain multiple bids under consideration. This discordant view is characteristic of a muddled process that has seen several interested parties attempting to maintain irreconcilable positions. Broughton’s great challenge is to attempt to channel a divided board towards a single outcome. This, as last night’s development demonstrates, has not been easy.

Broughton has maintained that his principal concern is to ensure not that the club is sold but that it is sold to the right bidder, one who can pay off the debts, finance the purchase of a new stadium and guarantee the future funding of the club.

The current owners, Tom Hicks and George Gillett, are said to be motivated by a desire to recover their money. They injected £84.6m in the 12 months to July last year, on top of £60.7m they had already plunged into the club in their previous two years as owners, and they are also hoping to gain some cash return for their shares. This meant they were not disposed to approving the Huang bid.

“Our goals do not include enriching the current owners,” said Huang’s long-term business partner, Marc Ganis, recently.

Gillett, meanwhile, has been promoting the credentials of Yahya Kirdi, whose proposal was said to include hundreds of millions of pounds for the shares that others consider worthless. There have been fears that if Broughton and his investment-banking advisers, Barcap, were to dismiss this out of hand in favour of Huang’s bid, it could leave him open to a personal liability for litigation from Hicks and Gillett.

Yet the patience of Huang, who is said to have been keen in investing heavily in the transfer market, has snapped. His camp stresses he has fulfilled every request for documentation asked of him, including proof of funds. This has never been corroborated by those charged with selling the club.

“Over the past few months we learned first hand that Liverpool has a very special place in the hearts of millions of fans around the world,” Huang’s statement went on to say. “We concluded that a plan that properly capitalises the business and provides funds for a new stadium and player-related costs would allow Liverpool to provide its great fans with the success they deserve.

“Our strategy and unique ability to expand the fan base in Asia would have been of benefit to all. We regret that we will not have the opportunity to implement this strategy. We thank the many Liverpool fans who expressed support for our efforts and wish the club great success in the years to come.”

The Spirit of Shankly supporters’ groups has for one been left frustrated by Huang’s decision to walk away from a possible Anfield buyout. A spokesman said: “We have got questions and we need and deserve the answers. We are the important stakeholders in all of this.The anger and frustration is growing and the situation at the club needs resolution sooner rather than later, but it is imperative that we get it right. The nightmare [of Hicks and Gillett] needs bringing to an end.”

There remains a belief, held not only by Hicks and Gillett, that Liverpool is undervalued. However, Huang will now observe the sale process from a distance. If he does return to the table, it will be with a reduced offer for the debt holder, the Royal Bank of Scotland. RBS would then face the invidious decision as to whether to subsume Liverpool within its own group by swapping its debt for equity and managing the club through its corporate restructuring team, or to accept whatever other bids later arise.

LiverpoolMatt Scottguardian.co.uk

• Plan would see current executive structure remain in place
• Gillett and Hicks unable to block bid if approved by board

Kenny Huang has delivered an outline takeover proposal to Liverpool’s chairman, Martin Broughton, pledging to erase the club’s debt, build a new stadium and to provide significant funding for player transfers.

Marc Ganis, Huang’s long-term associate and a sports consultant who lives in Chicago, today confirmed that he made contact with the Liverpool board on Monday on behalf of the Hong Kong-based investment vehicle, QSL Sports.

“We haven’t submitted a formal proposal but we submitted the broad parameters of what a proposal would look like to see if it would be welcomed, and it was,” said Ganis. Preparing to fund the deal, as revealed by the Guardian yesterday, is the China Investment Corporation, as a “passive investor”.

Also involved in QSL alongside Huang and Ganis is Guang Yang, a senior investment-fund manager with Franklin Templeton. Huang and Yang would oversee the day-to-day operations at the club, however Ganis reassured fans that the current executive structure, led by the managing director, Christian Purslow, and commercial director, Ian Ayre, would remain in place.

“From what we have seen from afar, many of the people currently running Liverpool are doing a good job,” said Ganis. “There shouldn’t be an expectation there would be a mass upheaval if we submit and are approved.”

However a deal would see the departure of Tom Hicks and George Gillett. The pair are known to believe the club is worth £800m but Huang’s consortium will not stretch beyond repayment of the loans they have invested in the club, and would provide no value for their shareholdings.

“What is not one of our goals is the enrichment of the existing owners,” Ganis said. “If we submit a proposal and it is accepted, it would be focused on the future and not the past. “If anybody wants to [pay for the Hicks/Gillett shares], good luck. We know what we would be prepared to do. If somebody else wants to look at it in a different way, it’s their money. That would be their business, not ours.”

There will be little Hicks and Gillett can do about that. It is Broughton and his co-directors Ayre and Purslow who hold sway in the takeover battle surrounding the Anfield club. Although Hicks and Gillett remain on the board, under the terms of the latest refinancing agreement on Liverpool’s £237m loan with Royal Bank of Scotland, they cannot determine who takes over if Broughton, Ayre and Purslow vote en bloc in favour of any particular bidder.

Since their principal motivation is the future stability of the club, Ganis and Huang thus made great play of the potential for huge revenue growth if the club taps in to the Chinese market, which QSL would be uniquely well-placed to achieve.

LiverpoolMatt Scottguardian.co.uk

• Chinese businessman criticises uninformed speculation
• Huang has only ‘registered interest in investing’

Chinese businessman Kenny Huang has denied reports he has made a formal bid for Liverpool.

The founder and chairman of Hong Kong-based investment company QSL Sports Ltd has been in talks with Royal Bank of Scotland for some time over buying out Liverpool’s £237million debt.

That would give him “a ridiculously large amount of leverage”, a source said on Monday, allowing him to force out the unpopular owners Tom Hicks and George Gillett.

However, Huang has stated that reports of an official bid are premature.

His statement read: “In response to widespread media reports that Kenny Huang had made a formal bid for Liverpool Football Club, Mr Huang would like to emphasise that he has registered interest in investing in Liverpool FC but has made no formal bid.

“There has been much speculation and commentary from a wide array of people, many of whom have little knowledge of the facts.

“Unless there is a statement that specifically comes from Mr Huang or his authorised representatives, which presently is solely Hill & Knowlton Hong Kong office, we would suggest such comments should be given little credence.

“At this point in time there is nothing further for Mr Huang to announce. If there comes a time where this changes, we will make the appropriate announcements.”

Huang is backed by one of the wealthiest investment funds in the Far East and is well known in China for his interests in baseball and basketball, having last year bought a 15% stake in American National Basketball Association franchise Cleveland Cavaliers.

He also has long-term deals to develop China’s domestic baseball and basketball leagues in a nation where the two sports are rapidly growing in popularity.

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