From The Times
March 15, 2010
Rhône Group makes offer for stake in Liverpool
George Gillett (left) and Tom Hicks have added to Liverpool's debt with their takeover of the club
Tony Barrett
*
The Liverpool ownership saga has yet to be resolved but Rhône Group, a New York-based investment vehicle, has become the first of several interested parties to declare its hand by making an official proposal to the club.
Rhône Group, run by a pair of billionaires, Steven Langman and Robert Agostinelli, has been in talks with Liverpool for several weeks and its interest became known to The Times last week, only for club officials to deny that an offer was imminent.
That offer was made in the early hours of Saturday morning, with Rhône seeking to acquire a 40 per cent majority stake in the club for a fee in the region of £110 million. The bid has yet to be discussed by the Liverpool board, which is hopeful that other concrete proposals will be put forward before the Easter deadline set by Christian Purslow, the club’s managing director.
Having valued the club at upwards of £500 million, Tom Hicks and George Gillett Jr, the co-owners, are known to be reluctant to accept the offer from Rhône, but with the Royal Bank of Scotland, to which they owe £237 million, demanding that this debt is cut by £100 million by July, the American duo could be forced into doing a deal that would significantly dilute their shareholding.
The experience of American ownership has been a bitter one for the Liverpool supporters, who have been angered by the failure of Hicks and Gillett to honour a series of promises made at the outset of their partnership. As such, Rhône would need to prove from the outset that its commitment to improve the club is backed by hard cash and not yet more borrowing if it is to stand a realistic chance of receiving backing from the fans.
Initial fears that the offer from Rhône amounted to little more than another leveraged buyout have been allayed by club sources, who have indicated that the bid involved equity, not debt.
The need for investment in the club has been all too apparent of late, with Liverpool’s financial problems off the pitch mirrored by a struggle for form on it. Fernando Torres, one of the few players to highlight the shortcomings of his employers, has again spoken his mind on the matter, insisting that “four or five” new signings must be brought in this summer if Liverpool are to stand any chance of competing for the honours he craves.
Rafael Benítez is aware of Torres’s frustration but, before tonight’s Barclays Premier League game against Portsmouth at Anfield, the Liverpool manager has insisted that his record signing is not alone in his acute sense of dissatisfaction.
“His main motivation is winning trophies,” Benítez said. “That is always the main topic in any discussion between us. He wants to be playing in the Champions League, but it is not just him. We all want that. It is important to me, the other players, and everyone connected to the club.”
Victory against the bottom club would boost Liverpool’s chances of qualifying for the Champions League, but having lost to Portsmouth this season, Benítez is taking nothing for granted. “People are saying we have to score a lot of goals because it is a team at the bottom, but the aim is to win and play well, that is all,” Benítez said.
http://www.timesonline.co.uk/tol/sport/football/premier_league/liverpool/article7061803.eceLiverpool to open talks with Rhône Group over sale of 40% stake
• US group proposes to invest £110m to cut debt
• Holdings of Tom Hicks and George Gillett would be diluted
* Matt Scott and David Conn
* guardian.co.uk, Sunday 14 March 2010 22.35 GMT
Liverpool
Liverpool's co-owners, Tom Hicks and George Gillett, were told by Royal Bank of Scotland last year to cut the club's £237m debt by at least £100m this summer. Photograph: Paul Ellis/AFP/Getty Images
Liverpool have received what they consider the first serious offer to buy into the club after it was revealed that they are ready to open talks with the Rhône Group, a firm of multi-million pound fund managers.
The group, which is based in New York and has offices in both London and Paris, is proposing to invest £110m directly in Liverpool, which would settle a little under half of the club's debt. Rhône will be issued new shares in the club in return, diluting the current 50% stakes of Liverpool's co-owners, Tom Hicks and George Gillett.
The size of the equity stake which Rhône would be issued will become a matter for negotiation. It is believed the starting point for those talks will be for the co-owners' stakes to be reduced to 30% each, with Rhône taking the remaining 40%.
The offer was received by Liverpool on Saturday and the matter has yet to be discussed at board level, though early indications are that the directors will consider it a sound first proposal. Liverpool's board, and the co-owners, will hope Rhône's bid encourages other viable bidders to come through with firm proposals.
It is thought that Gillett and Hicks are likely to consider that the valuation the Rhône group is putting on the club does not meet their aspiration to make a sizeable profit from their three years in control of Liverpool. It is understood the pair value the club's equity at more than £300m. The Rhône deal would value Liverpool's shares at £275m which Hicks, in particular, may not regard as an adequate figure. By contrast, there is talk of a £1.5bn offer for Manchester United from the Red Knights group of investors.
A further obstacle may be the lack of money going into the pockets of Hicks and Gillett. The Rhône deal involves paying off debt only and the current co-owners would, as a result, see their shareholdings in the club diluted.
However, with time running out for Liverpool in an ever more competitive race for a place in next season's Champions League, a competition worth a minimum of £10m a year in direct revenues alone, there is an urgent need to secure fresh funding. Liverpool will hope that Rhône's interest will flush out other potential investors and, either way, the club's chances of raising more funds will be improved by the reduction in its debt.
Hicks and Gillett have been told by the Royal Bank of Scotland, as part of the refinancing package they agreed last year, that they have to reduce Liverpool's £237m debt by at least £100m this summer and to that end their chief executive, Christian Purslow, has been working to find outside investors.
The Rhône group is the first to have sensed a chance to capitalise on Liverpool's distress. At a time when US investors are increasingly looking to the English leagues for stakes in clubs, Rhône, a mid-size global investment business, would be looking for a long-term stake in the club. Although it would not have control of Liverpool's affairs, it would break the 50-50 voting share Hicks and Gillett hold, which at times of disagreement between the owners is prone to cause stalemate.
Rhône's proposal would also improve the club's credit-worthiness which could, in turn, lead to finance being secured to finally begin work on the long-awaited new stadium in Stanley Park. The Rhône Group, established in 1997, says it specialises "in mergers and acquisitions, leveraged buyouts, recapitalisation and partnerships with particular focus on European and trans- Atlantic investments. It is a private company which has been owned and managed by Robert F Agostinelli and M Steven Langman since inception."
Agostinelli helped build up Goldman Sachs' mergers and acquisitions business in London, then became a Lazard partner in 1987 before leaving to start the Rhône Group. Langman also worked at Lazard.
http://www.guardian.co.uk/football/2010/mar/14/liverpool-rhone-group-saleLiverpool 'in investment talks with US group'
Liverpool have received a £118.5m investment bid from private equity firm Rhone Group, according to reports.
American co-owners Tom Hicks and George Gillett are obliged to reduce the club's £237m debt with Royal Bank of Scotland by £100m by this summer.
The deal would make the New York-based group the largest shareholder with 40%, Hicks and Gillett each falling to 30%.
The Press Association report added that the bid, tabled on Saturday, has yet to be discussed at board level.
If a bid were to materialise it would be the first positive result of Anfield chief executive Christian Purslow's search for new investors ahead of the bank deadline.
Aside from slashing the club's debt in half, the group's funds would also improve the club's credit-worthiness, which in turn would make Liverpool more attractive for further outside investment.
Hicks and Gillett took control of Liverpool in February 2007, each taking a 50% stake.
However, their reign has proven unpopular with Reds fans, with the debt burden they have placed on the club and the delayed construction of the proposed new stadium at Stanley Park coming in for particular criticism.
Founded in 1996, the Rhone Group is owned and managed by financiers Robert Agostinelli and Steven Langman.
The company describes itself as "one of the world's leading mid-market private equity firms", and has its headquarters in New York with other offices in London and Paris.
http://news.bbc.co.uk/sport2/hi/football/teams/l/liverpool/8567036.stm