YESTERDAY’S announcement by Dubai International Capital that it is withdrawing its offer to buy Liverpool Football Club leaves all the cards in the hands of rival bidder George Gillett.
Takeover Panel rules mean that the Middle East group can’t come back into the bidding for six months, making the contest currently a one-horse race.
DIC blamed their decision to withdraw on the club’s board, which didn’t seem keen to recommend the £450m offer. That would suggest that Mr Gillett has firmed up a higher offer that should complete shortly.
“You have to remember the bird in the hand principle,” said James Dow, a corporate finance expert who runs his own corporate finance advisory firm, Dow Schofield Watts, in Warrington. Mr Dow has advised a range of football clubs including Ajax, Celtic, Barcelona and Everton.
“I hope the board are confident. They had an offer that they were previously prepared to put to shareholders which met all the financial needs of the club and provided an exit for the current shareholder. Now they have dropped it, I can only assume their alternative plan is a good one.
“This strengthens the hand of Gillett in his dealings with Liverpool.
“If a bidder says they are withdrawing, they have to stay out for six months. It clears the way for Gillett. So the board would have to be confident that Gillett’s offer was significantly better all round for the club. The board are entitled to look at all the terms, not just the immediate return to shareholders.”
Mr Gillett has given Liverpool’s board undertakings that once in control he will not scrap the plan for a new stadium at Stanley Park in favour of sharing a ground with Everton, and that he will provide a kitty to finance transfers in the future.
However, Mr Dow warned that such undertakings were not binding in practice.
He said: “It would be extremely unlikely they could enforce a post- completion covenant. It relies on the goodwill of the parties.”
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