Topic: Liverpool owner Hicks selling Texas Rangers shares

[reddwarf12003]

Right you lot want hard facts, here's some hard facts for you :-



football-rumours.com:

LFC:
I work for a large financial establishment, and the company has, on the request of the current Liverpool owners, been working on various ways to refinance the club, to release more funds – After months of trying and approaching several different banks, we have drawn a blank (no–one wants to take the risk) – So, the only option is to sell. the good news is, that there are three genuine offers on the table – All for similar amounts and all promising to fund the new stadium and release funds for transfers (in the region of £35m)– The Americans are reluctant to sell to DIC, as they have not been impressed with recent dealings, so it is potentially down to two, being a consortium from Kuwait plus a new bidder which is being fronted (but not solely funded) by none other than Richard Branson. He loves the idea of having his Virgin branding flashed all over the globe in an instant ! So, watch this space ! Fact – not rumour 

Last three word got me for a min

[4pool]

Can you explain this to me please?

Do i need to?

What is RBS and Wachovia's loan amount to the club? According to the article it would be £170m.

The banks would  require interest to be paid on the loan. Hence £350m v £170m means the actual interest payments to the banks are substantially less, no?

[Something Else]

Do i need to?

What is RBS and Wachovia's loan amount to the club? According to the article it would be £170m.

Where have you got that from, its not in the article I have read, and I have read it twice now?

So yes, please explain again.

[shockwave_dave]

Do i need to?

What is RBS and Wachovia's loan amount to the club? According to the article it would be £170m.

The banks would  require interest to be paid on the loan. Hence £350m v £170m means the actual interest payments to the banks are substantially less, no?

Don't be so bloody daft.

Personal guarantees are not consideration for the loan. The loan is what it is, that amount of £350m. Guarantees are there for bank security in the event of default. Nothing whatsoever to do with the capital of the loan itself

[Something Else]

Don't be so bloody daft.

Personal guarantees are not consideration for the loan. The loan is what is, that amount of £350m. Guarantees are there for bank security in the event of default. Nothing whatsoever to do with the capital of the loan itself

shhh you, i wanted to see his explanation

[maj]

Do i need to?

What is RBS and Wachovia's loan amount to the club? According to the article it would be £170m.

The banks would  require interest to be paid on the loan. Hence £350m v £170m means the actual interest payments to the banks are substantially less, no?

4pool mate, who gave you them figures.

[shockwave_dave]

shhh you, i wanted to see his explanation

 

Don't worry, im sure you will still be treated to his wisdom on this subject 

[shelovesyou]

The club itself is in 185M of debt not 350M , the difference is met by guarantees from the yanks . . .
is that right 4pool ? ?

[maj]

Are the figures posted taking into account the extra 6 months extension??

[vanoord]

Do i need to?

What is RBS and Wachovia's loan amount to the club? According to the article it would be £170m.

The banks would  require interest to be paid on the loan. Hence £350m v £170m means the actual interest payments to the banks are substantially less, no?

Oh Good Lord Above!

The facility was for £350m, that being the total amount that could be borrowed.

That figure included £60m for the stadium prelims, of which perhaps half have been spent on fees etc.

It's likely that around £320m has actually been drawn down (that, incidentally is £16m of interest a year).

If H&G are refused a new loan by RBS and are unable to attract new investors and are unable to sell the club, then RBS will become defacto owners.

If RBS sell the club for less than they are owed, they will be able to make a claim against the assets that Hicks & Gillett have pledged as a guarantee, up to £90m each.

Under no other circumstances does the guarantee come into play!

[Something Else]

Oh Good Lord Above!

The facility was for £350m, that being the total amount that could be borrowed.

That figure included £60m for the stadium prelims, of which perhaps half have been spent on fees etc.

It's likely that around £320m has actually been drawn down (that, incidentally is £16m of interest a year).

If H&G are refused a new loan by RBS and are unable to attract new investors and are unable to sell the club, then RBS will become defacto owners.

If RBS sell the club for less than they are owed, they will be able to make a claim against the assets that Hicks & Gillett have pledged as a guarantee, up to £90m each.

Under no other circumstances does the guarantee come into play!

woooo i feel clever, im not up with all this finance shit, i a lot of the time compare it to car loans and house mortgage as it is all i know, and i understand all you said, and it was how i thought it was

yeah me

[NotBeenInAigburthSince2008]

4pool, I generally disagree with everything you say, but at least in your attempts to manipulate facts you're usually slippery and hard to pin down. Your deliberate misunderstanding of what a guarantee is, though, is just plain dim.

[No666]

If the above scenario of Vanoord's came about, and let's say RBS sell for £280m, would RBS have to claim equally against Hicks and Gillett, (£20m each) or if one was broke could they claim the full £40m deficit off the one with the money? IE Is it now in Gillett's interests (as the seemingly richer one) to try to help Hicks stay in the game with the aid of smoke and mirrors, because otherwise he's going to take the whole hit?

[WaltonRed]

What a weird thread.  Been away for a couple of days after Arsenal match and come back to this!!

Few facts might be of interest.

1.  the chap Hicks was showing round was neither an Arab, nor from RBS.  He is called Christian Furslow and he is well known around the club as he was previously close to Steve Morgan and is now advising Hicks.  He works for a Hedge Fund in London (I think Mid Ocean if I recall correctly).  He has been advising Hicks for some time on capital matters.

2.  Gillet however was with an Arab client but I have no idea who that person was.

[Something Else]

If the above scenario came about, and let's say RBS sell for £280m, would RBS have to claim equally against Hicks and Gillett, (£20m each) or if one was broke could they claim the full £40m deficit off the one with the money? IE Is it now in Gillett's interests (as the seemingly richer one) to try to help Hicks stay in the game with the aid of smoke and mirrors, because otherwise he's going to take the whole hit?

wow thats an interesting one, and would be facinating to know the result, I imagine as it is equal shares it would be equal amounts and do the value of the guarantees not stay the same as originally agreed. Like you would get with a guarenteed balloon repayment. I know this is not the same with a mortgage but i would imagine with the short nature of the loan then there may be some fixed valuations?

[No666]

Whoa! Welcome back WaltonRed!  Can you explain what 'advising on capital matters' means?

[maj]

What a weird thread.  Been away for a couple of days after Arsenal match and come back to this!!

Few facts might be of interest.

1.  the chap Hicks was showing round was neither an Arab, nor from RBS.  He is called Christian Furslow and he is well known around the club as he was previously close to Steve Morgan and is now advising Hicks.  He works for a Hedge Fund in London (I think Mid Ocean if I recall correctly).  He has been advising Hicks for some time on capital matters.

2.  Gillet however was with an Arab client but I have no idea who that person was.

Merril Lynch, JP Morgan, Rothschild and now Christian Furslow. How many people will it take Hicks to realise he is in deep shiit. Furslow is his last attempt to raise money.

[vanoord]

If the above scenario of Vanoord's came about, and let's say RBS sell for £280m, would RBS have to claim equally against Hicks and Gillett, (£20m each) or if one was broke could they claim the full £40m deficit off the one with the money? IE Is it now in Gillett's interests (as the seemingly richer one) to try to help Hicks stay in the game with the aid of smoke and mirrors, because otherwise he's going to take the whole hit?

If I was RBS, I'd go for both of them and see what I got first.

I'd also have made sure they had joint and several liability under the terms of the original agreement:

Under joint and several liability, a claimant may pursue an obligation against any one party as if they were jointly liable and it becomes the responsibility of the defendants to sort out their respective proportions of liability and payment. This means that if the claimant pursues one defendant and receives payment, that defendant must then pursue the other obligors for a contribution to their share of the liability.

[RedJam70]

What a weird thread.  Been away for a couple of days after Arsenal match and come back to this!!

Few facts might be of interest.

1.  the chap Hicks was showing round was neither an Arab, nor from RBS.  He is called Christian Furslow and he is well known around the club as he was previously close to Steve Morgan and is now advising Hicks.  He works for a Hedge Fund in London (I think Mid Ocean if I recall correctly).  He has been advising Hicks for some time on capital matters.

2.  Gillet however was with an Arab client but I have no idea who that person was.

Christian Purslow, managing director of Mid Ocean Partners. Bit of  big wig then eh.

[vanoord]

Christian Purslow, managing director of Mid Ocean Partners. Bit of  big wig then eh.

http://www.midoceanpartners.com/Team/teamMember.aspx?id=30

I reckon his direct phone number will be removed from that page quite soon...

[maj]

If I was RBS, I'd go for both of them and see what I got first.

I'd also have made sure they had joint and several liability under the terms of the original agreement:

from my understanding they are joint at the hip and if one cant afford part of the loan the other has to pay the shortfall.

[RedJam70]

http://www.midoceanpartners.com/Team/teamMember.aspx?id=30

I reckon his direct phone number will be removed from that page quite soon...

 

Anyway not as big a wig as I thought, he's not on the executive board. Pffft.

[Something Else]

http://www.midoceanpartners.com/Team/teamMember.aspx?id=30

I reckon his direct phone number will be removed from that page quite soon...

what number..... not this one

44.20.3178.8499

[maj]

Anyway not as big a wig as I thought, he's not on the executive board. Pffft.

http://www.private-equity.org.uk/profile_career_bio.php?contact=Christian+Purslow

[RedJam70]

Maj, ok maybe more of a big wig than I thought! In my defence I was just googling him now and found that myself but it's not on the Mid Oceans website that I can see. 


Sorry Mr Purslow, Partner of Mid Ocean Partners.  

[vanoord]

Quite an interesting article on Wikipedia: http://en.wikipedia.org/wiki/MidOcean_Partners

Since its inception, MidOcean has managed three private equity funds:
MidOcean Partners – Approximately $2 billion vehicle used to house the investments acquired from Deutsche Bank through the secondary purchase.
MidOcean Partners Fund II – $520 million of investor commitments, primarily from investors in the original 2003 secondary transaction.
MidOcean Partners Fund III - $1.25 billion raised as a fully independent private equity fund in 2007

Looks as if Hicks is trying to raise money to keep control...

[west_london_red]

What a weird thread.  Been away for a couple of days after Arsenal match and come back to this!!

Few facts might be of interest.

1.  the chap Hicks was showing round was neither an Arab, nor from RBS.  He is called Christian Furslow and he is well known around the club as he was previously close to Steve Morgan and is now advising Hicks.  He works for a Hedge Fund in London (I think Mid Ocean if I recall correctly).  He has been advising Hicks for some time on capital matters.

2.  Gillet however was with an Arab client but I have no idea who that person was.

Please dont tell me hes trying to get the actual finance from a hedge fund, and hes just after advice?

Edit didnt he run a hedge fund? why does he need advice from one then?

[maj]

Maj, ok maybe more of a big wig than I thought! In my defence I was just googling him now and found that myself but it's not on the Mid Oceans website that I can see. 


Sorry Mr Purslow, Partner of Mid Ocean Partners.  

LOL I think his milking any money hicks has left. he knows he cant help him

[maj]

How much money can a hedge fund make from lfc??? Not enough for them to get involved imo. Building a stadium will cost atleast 350 million.

[west_london_red]

How much money can a hedge fund make from lfc??? Not enough for them to get involved imo. Building a stadium will cost atleast 350 million.

Glazer borrowed some money from hedge funds to the buy the Mancs at extraordinary levels of interest. Hence my concern.

[maj]

Glazer borrowed some money from hedge funds to the buy the Mancs at extraordinary levels of interest. Hence my concern.

They made a loss of close to 50 million last year. Glazier will learn the hard way and the manc fans lol

[west_london_red]

They made a loss of close to 50 million last year. Glazier will learn the hard way and the manc fans lol

Yes, I saw that on the BBC. Either way, Hicks is desperate enough, and the hedge funds are greedy enough, plus a lot more ruthless then the likes of RBS.

[4pool]

Something Else

Here's the article in question. I have highlighted the bit I have posted about.

I remember this article from the Financial Times just a year ago. I believe it's worth posting again, so that we can at least remind ourselves why we are still in this mess and why I for one think we are in it a good deal longer.

-------------------------------------------------------------------------------------------------------------------------------------------

Feathers fly in Anfield power struggle

By Roger Blitz

Published: April 11 2008 21:51

Even by the standards of the absurd power struggle that has raged at Liverpool Football Club for the past nine months, this week was pretty tumultuous.

A spectacularly successful night in the Champions League at its Anfield home on Tuesday was followed two days later by Tom Hicks, one of its co-owners, sending a three-page letter to chief executive Rick Parry ordering him to resign.

Mr Parry refused, describing the idea as “offensive” and bemoaning “more dirty linen being washed in public”.

Then, George Gillett, the other co-owner, hit back at his business partner. “Any decision to remove [Mr Parry] would need the approval of the full Liverpool board,” Mr Gillett told the Liverpool Echo on Friday. “Rick retains our full support.”

Meanwhile, Sameer al-Ansari, chief executive of Dubai International Capital, which has been stalking the club for some time, this week gave an interview in which he suggested it had pulled out of buying Liverpool, though DIC insiders have since told the Financial Times it had done no such thing. It is simply waiting in the wings until the Hicks/Gillett battle is settled.

The Liverpool saga has resembled a badly-written soap opera for the whole of its erratic season on the pitch. Mr Hicks and Mr Gillett, the US sports franchise owners who bought the club from under DIC’s nose in February 2007 for £219m, have long since given up talking to each other after a series of increasingly public disputes over management style, strategy and future ownership.

There have been instances of farce, too. Tom Hicks jr, Mr Hicks’s son and a fellow board member at the club, was drummed out of a Liverpool pub after making an ill-advised attempt to win over disenchanted Liverpool fans to his father’s stewardship.

It is a far cry from the early days of the Hicks/Gillett partnership, when the duo were hailed on Merseyside as custodians of a new era for Britain’s most successful club.

Liverpool continued to achieve success during the tail end of the club’s 50-year ownership by the Moores family, well known on Merseyside for its Littlewoods pools empire.

But when the family decided to sell, DIC and Mr Ansari – a dedicated Liverpool fan who on his occasional visits to Anfield still sits in the legendary Kop enclosure with his two sons and his daughter – thought their time had come. In December 2006, DIC was made preferred bidder. But according to one person close to the situation, Rabih Koury, then chief executive of its emerging markets division, appeared unable to close the deal. Mr Koury left the company “by mutual consent” last month.

Out from the shadows stepped Mr Gillett, owner of the Montreal Canadiens ice-hockey club, who Liverpool had been talking to for some months. Though unable to purchase the club single-handedly, he brought into the frame Mr Hicks, whom he knew from previous business ventures. Mr Hicks was co-founder of the investment firm, Hicks, Muse, Tate & Furst, whose Hicks Holdings empire owns the Dallas Stars ice-hockey team and the Texas Rangers baseball team, previously owned by George W. Bush.

Crucially, Mr Hicks brought with him substantial experience in sports stadia development, the next phase in Liverpool’s history. They agreed a 50-50 partnership and quickly persuaded the Liverpool board that they were a better prospect than DIC.

“The board always liked [Gillett], he was good to deal with, had a passion, wanted to get things done and seemed to get the issues around the club’s history.

“A strong offer came, the price seemed about right, and the relationship appeared very healthy.”

According to one close observer of the saga, the Moores family was given assurances from the US duo that they were “going to come in with a truckload of cash”.

The US duo took hold of the existing stadium design plans and redrafted them, spending up to an additional £20m, according to one observer. “They wasted serious cash,” the observer said.

The relationship began to fracture around autumn of last year. Mr Gillett is a private and discreet man, according to those who know him. He became alarmed at his partner’s frequent public indiscretions. For example, Mr Hicks let it be known he had made an approach for Jürgen Klinsmann, the former German international and coach, to replace the incumbent Rafael Benitez as Liverpool manager. It was part of a running feud between the manager and Mr Hicks, which also involved public clashes over the size of the budget for player transfers.

All this might have been overlooked if the underlying business plan for Liverpool was sound. The main initial hurdle appeared to be convincing the Moores family and fans that they would not do “a Glazer” and load debt on to the club in a deal similar to the 2005 takeover of Manchester United by Malcolm Glazer, owner of the Tampa Bay Buccaneers American football team.

The problem, according to one insider, was that the long-term planning was non-existent. Their due diligence of Liverpool, the insider said, took only a few days. Their deal was covered by a short-term bridging loan of about £185m. Their interest in Liverpool, the insider added, had more to do with using the club as collateral against their sports franchise assets in the US where there are limits on the amount of debt owners can raise to bankroll their teams. Hicks Holdings denies this.

In January, less than a year after buying the club, the US duo were having to refinance their purchase in a stalled debt market. The £350m deal they arrived at involved huge personal guarantees equivalent to £90m apiece. Their Kop Holdings investment vehicle took on £245m of the refinancing, the remaining £105m debt falling on the football club.

Servicing the £245m debt involves an inter-company loan of £60m paid by the club to Kop Holdings over three years. The promise not to ape Manchester United appears to have been broken.

According to DIC insiders, the refinancing – which lasts only 18 months – was only agreed by Royal Bank of Scotland and Wachovia, the US bank, because the lenders knew there was a willing buyer waiting in the wings.

Despite his sense of pique back in 2007, after being pipped to the Liverpool deal, Mr Ansari never walked away. DIC kept up lines of communication with the co-owners individually. At one point last year, Mr Hicks dangled a 15 per cent stake in front of Amanda Staveley, whose PCP Capital Partners advisory company is fronting DIC’s attempt to buy Liverpool. DIC concluded that the offer amounted to a valuation of the club of £1bn, and said no.

Mr Gillett appears to have been more genuinely eager to sell, having concluded last autumn that his partnership with Mr Hicks was fractured beyond repair. Mr Gillett was willing to sell his stake to DIC in a deal that would see him make £80m from his original investment. But under a clause in their purchasing deal, neither co-owner can sell his stake without agreement from the other. Mr Hicks told Mr Gillett he could not sell.

DIC, which had made clear it was not interested in partial stakes, now entertained the idea of allowing Mr Hicks to take a small portion of his partner’s holding, leaving him with 51 per cent and DIC 49 per cent. But when Mr Hicks insisted on full managerial control, DIC abandoned that idea.

The animosity peaked on Thursday with Mr Hicks calling for Mr Parry’s resignation. He accused the chief executive of commercial shortcomings and missed opportunities in the transfer market.

Mr Gillett’s response on Friday, giving Mr Parry “our” full support, suggests he and DIC are now more convinced than ever that they are nearing the conclusion of the row.

One person close to the situation said DIC and Mr Gillett have already come to an in-principle agreement about a future transfer of ownership. This effectively means that DIC already wields substantial influence over Mr Gillett’s interest, another reason for Mr Hicks’s ire.

One denouement now suggested by some people in the anti-Hicks camp is that bankers could pull the rug from under his Liverpool investment.

There are suggestions that loans Mr Hicks holds against other investments are due in a few weeks’ time, though Hicks Holdings says there are no loans on any other assets.

Meanwhile, Mr Hicks has been in talks with Merrill Lynch about raising more money with a view to buying out his partner, though Mr Gillett has made clear he will not sell to Mr Hicks.

As Liverpool looks forward to another heady night of Champions League football at Anfield later this month in a semi-final showdown with Chelsea, it is hard to tell whether this almighty saga is heading into an impasse or an endgame.

http://www.ft.com/cms/s/0/5b619cf4-07fd-11dd-a922-0000779fd2ac.html?nclick_check=1

£90m apiece = £180m for the owners.

Deduct from the toal loan package of £350m.

Leaves the banks portion of the total loan deal at £170m.

[Something Else]

Something Else

Here's the article in question. I have highlighted the bit I have posted about.



£90m apiece = £180m for the owners.

Deduct from the toal loan package of £350m.

Leaves the banks portion of the total loan deal at £170m.

thats wrong, and im not saying the article is, though it might be but your working out is definitely wrong

[HarryLabrador]

thats wrong, and im not saying the article is, though it might be but your working out is definitely wrong

The article is not saying we deduct the amount guaranteed from the amount owed. Come on 4pool, this is not elementary arithmetic.

[electricghost]

Can someone tell me the difference between a hedge fund and a private equity group (as the Mid Ocean group describe themselves as?
 I thought DIC were a private equity group?

[Igor Zidane]

Can someone tell me the difference between a hedge fund and a private equity group (as the Mid Ocean group describe themselves as?
 I thought DIC were a private equity group?

Maybe mid ocean are buying us more like friggin ocean finance.

[richmond-red]

£90m apiece = £180m for the owners.

Deduct from the toal loan package of £350m.

Leaves the banks portion of the total loan deal at £170m.

Are you being deliberately obtuse?

The banks lent out 350mil. and this is the amount on which they levy interest payments. As someone said earlier - Vanoord? - the personal guarantees will only come into play if and when the loan payments are defaulted on.

[vanoord]

This really isn't good news.

This sort of investment fund has the potential to make Tom Hicks look kind and cuddly. At least with Hicks & Gillett, they're high-profile investors who come to the occasional game and put themselves in the limelight where personal reputation is part of their thinking. Although Hicks is a thick-skinned twat, at the end of the day he's still going to be swayed by how his deals will be viewed by others: there's pride to consider, for a start - and he's the sort of person who wants to have the little people who support his franchise to think he's a great guy.

A faceless investment fund wants one thing: money and profit. Nothing else.

An investment fund will generally run a company with little regard for how it works long-term: rather, they look at the figures and work out how much they can screw from it. The aim is to maximise profits in the short term, then sell it on to make the final big profit. What's left is usually pretty much wrecked and unsustainable.

A few months back, I was speaking to someone very high up in the corporate lending side of one of the big UK banks: as he put it, UK Plc is not mortally wounded, but the problem generally lies with second- and third-generation leverage buyouts, where there is no value left. And that's exactly what we'd become.

The concept that LFC may become the possession of a private equity firm is very worrying indeed: it would soon become a cash-cow to be milked until dry.

[maj]

From the roger blitz article: According to DIC insiders, the refinancing – which lasts only 18 months – was only agreed by Royal Bank of Scotland and Wachovia, the US bank, because the lenders knew there was a willing buyer waiting in the wings.

This is why they are showing so called buyers around anfield etc. its to make rbs think they have interest in the club. The kharafi leak was another PR thing by Hicks.