Takeover talk: sinking in a dogpile of rumourUpdated: March 10th, 2007
Another day, another frenzy of takeover speculation.
The names might have changed, but the club appear no closer to a takeover or new investment than we were 11 weeks ago. The “preliminary discussions with a third party” announced on PLUS Markets on Dec 7 have now dramatically moved on to “preliminary discussions with third parties” (link).
The latest batch of takeover stories started on Wednesday, sparked by speculation that the club were about to release a statement about takeover talks. As stock market rules oblige firms to provide information on any events that might affect the share price, this in itself was nothing to get excited about.
But the last couple of days have provided a good insight into the workings of the media, and of London’s financial district.
I was first tipped off on Wednesday afternoon, when I was informed that rumours involving “an American investor and a management buy-out led by Alistair Mackintosh” were now circulating in London’s financial districts.
An hour later I was checking my StatCounter and noticed two people from the BBC in London had visited this site. The first had found it by typing “american bid manchester city” into search engine Dogpile, suggesting that they too had heard the same rumours.
The origin appears to be an email service called the Business Insider which ran this story on Wednesday morning:
Manchester City FC could reveal details of a proposed sale when the club announces its interim results to the Plus Market next week. Chairman John Wardle said at December’s Annual General Meeting that he was prepared to “pass the baton” onto new investors. While Insider understands that a specific potential deal has since collapsed, the recent takeover of Liverpool FC has whetted the appetite of potential buyers. One bid is understood to be backed by US money, while chief executive Alistair Mackintosh is also said to be exploring a potential management-led buyout.
The claim about Alistair Mackintosh is an interesting one and had been doing the rounds for a couple of months. If true, it would represent a huge conflict of interest that would eventually result in him, or any other senior City employee connected with it, stepping down so an independent board could weigh up the bids. But the rumour was broadcast on BBC Five Live and mentioned in the Daily Mail before serious back-tracking stopped the story in its tracks.
With speculation about the US investor growing, the name of George Foster came into the frame. Foster is believed to be an associate of Michael Neville, who was involved in a bid for Aston Villa last year, though Neville was not thought to be involved this time. I tried in vain to dig up anything about a George Foster, and only found the Wikipedia site of a former US baseball star of the same name.
I was also told that investment bank Seymour Pierce might be acting on behalf of a potential overseas bidder. Seymour Pierce - run by former Football League Chairman Keith Harris, brokered the takeovers of Aston Villa, West Ham and Portsmouth and has also raised finance for Millwall, Celtic, and Tottenham (incidentally Keith Harris is also on the board of Wembley National Stadium Ltd, where David Bernstein is a director).
Yesterday London business freesheet City A.M ran this front page story, claiming that a former baseball player was planning a £70m bid for City through Seymour Pierce. It might be true, but the lack of hard fact does make it sound like the back end of a Chinese whisper.
Potential investors are without doubt sniffing around, though nothing I’ve heard so far suggests anything as dramatic as a “four-way battle”.
A reliable source tells me the group in talks with the club in December have ended their interest, while an English consortium that expressed interest has walked away from the table. I understand the group have the necessary funds available for a full takeover but have chosen to wait on the sidelines.
There have also been stories of an Indian-based dealmaker looking to buy a Northern club for £150m and a US-based Hedge Fund sizing up a 45p per share bid last year.
But what makes me doubt any of this will result in a full takeover is the question of what any potential bidder stands to gain from the deal. The West Ham takeover hinged on the four freehold properties the club owned, Aston Villa had a similarly enticing landholding while according to this Daily Telegraph story the Dubai consortium that failed to buy Liverpool expected to make a 25% annual profit on the investment over seven years by redeveloping Anfield.
City have no such landholdings to entice an investor and according to a chartered accountant I spoke to in December (link) are running at a deficit of £10m-£11m a year that so far has only been plugged by loans from Wardle & Makin and the sale of SWP.
It’s all beginning to feel like a car boot sale after midday.
The early birds have already snapped up the items they can make a quick buck from and driven off - leaving poor old City attracting the odd curious glance, and being prodded and poked by the bargain hunters that remain.
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I might have to hold my hands up after inadvertently playing a role in the Philip Anschutz rumours, which have now been semi-officially denied by the club.
In late December I wrote this story suggesting the billionaire fitted the bill as the mystery American in talks with the clubs. Although I later stated that Anschutz wasn’t the American in question (new Liverpool owner George Gillett is still the most likely candidate), the rumour had gathered strength in the last couple of days.
It now seems unlikely that the super-casino would be a tempter for a potential bidder, as Anschutz is the only person who would have spanned both the football and gambling world in this instance.
Meanwhile, bluebrendan at Citymancs would like to point out that as well as the Millennium Dome, Anschutz also owns John Prescott. Though this may just be a rumour.