Friday, September 25, 2020

Why Newcastle fans should exercise caution with latest takeover rumours

As I’m sure you’re no doubt aware, Newcastle United are reportedly set to be taken over by the Saudi Arabian Public investment fund, with a helping hand from a familiar face.

Amanda Staveley, who has been trying to negotiate a deal for a takeover in the north east for two years, is said to be involved in the deal. She is joined by British billionaire duo the Reuben brothers – who reportedly have a stake in the bid.

As Newcastle fans know all-too-well, we’ve been here before

Yes, yes, yes – we’ve been here numerous times in the past. Amanda Staveley, Peter Kenyon, Sheikh Khaled Bin Zayed – we’ve heard it all time and time again. However, the major difference between now and then for me is the source of the leak – the Wall Street Journal.

There are few more reputable news outlets than the WSJ, and given that sports – particularly British sports, is not exactly their forte, they have no reason to fabricate links or work in cohesion with the fabled Keith Bishop PR spin machine…

In each of the previous instances, there has been one huge caveat to the deal that has eventually seen it fall through – none of them ever really seemed all that legitimate.

From Midhat Kidwai communicating with fans via Whatsapp to Peter Kenyon’s hilariously poor “brochure” documenting his plans for the future, there’s always been a very unprofessional feel to the proceedings.

This time around, we’re yet to see anything like that – but with sources telling Chronicle writer one thing and then Telegraph writer Luke Edwards the exact opposite, it’s hard to know where we stand.

The takeover has been leaked to the press – which is never a good thing

“The day someone buys Newcastle, they’ll do their due diligence – and finished. It will happen like Manchester City. By the time the media find out, it’s already complete.”

That quote, from the mouth of current owner Mike Ashley, is perhaps the most important thing he’s said in recent years – particularly with relevance to any potential takeover. Whenever the media find out about any potential deal, it becomes very hard to complete the deal – if nothing else because it pi**es Ashley off.

It worries me that this report has been leaked to the media. If the deal was as close as the Saudi sources are telling Lee Ryder it is, what need would they have to leak the details of it to the media?

For me, the fact that they have done makes me a little skeptical with the whole situation. As much as I’m hopeful the rumours are true and we will indeed see a new owner of Newcastle United in the near future, the fact the media have been informed before completion of the deal makes me doubtful.

Amanda Staveley is involved…

Amanda Staveley attempted to takeover Newcastle United two years back as she reportedly tabled a bid alongside her investment firm PCP Partners. As expected, the deal ultimately fell through – reportedly due to the way Staveley used the media.

If the reports were to be believed, Staveley and Ashley left the negotiating table not exactly on the best of terms – with Ashley angered by Staveley’s pressure tactics.

It seems a similar thing is happening here, as the media have been informed. How long before she adds fuel to the fire by turning up at a Newcastle game or giving an exclusive interview to a Newcastle journalist?

I’d always err on the side of caution wherever this woman is involved, especially given the reportedly fractured relationship between her and Ashley.

Newcastle owner Mike Ashley has been known to… move the goalposts

If reports from previous takeover attempts at Newcastle are to be believed, Mike Ashley has been known to “move the goalposts” so to speak when it comes to this type of deal.

“What’s another £10m to you?” That’s the kind of man we’re dealing with here, making any potential deal very difficult to negotiate. As much as he says he’s a willing seller, he doesn’t exactly present himself as one.

Actions speak louder than words and although the words he has spoken have sounded good, his actions and alleged negotiating manner have made it seem very different.

It must be said, this is all merely conjecture based off things I have personally read in the media and across social media from various reporters and insiders.

The remaining stages

It does seem as though this bid is genuine, and that there is a genuine will from the Saudi Arabia Public Investment Fund to complete a takeover of Newcastle United. Despite that, we’re a very, very long way away from a takeover being completed.

As reported in an enlightening article on Chronicle Live today, there are five crucial stages to a takeover. First, the due diligence and non-disclosure agreement (NDA) – i.e the very early stages.

It seems this would be the most likely stage the potential takeover could be at, and would explain the reason why some reports have claimed that Mike Ashley has been “angered” by the deal being leaked to the Wall Street Journal. Breaching an NDA would seriously hamper the negotiations and could lead to the bidder(s) being sued…

The next stage of the process is a “heads of terms” agreement which is a short document explaining exactly what is being offered and what the bidder would receive.

After that comes the Sales purchase agreement, which is where things start to get very serious. This is a very extensive legal document and is the “actual agreement that transfers the shares of the seller to the buyer”, as mentioned in Mark Douglas’ fantastic Chronicle report.

Then the final stages of a takeover would be Premier League notification, wherein the parties involved must notify the Premier League at least ten days before the takeover can be completed. Then comes the fabled owners and directors test, wherein the Premier League deem whether or not the new owners are fit and able to run the club.

So, a long way to go in what will be a very difficult process, not helped by the media finding out about the deal at an early stage. At this point, it feels only natural to be excited at the potential deal happening, especially given the seemingly genuine nature of the reports, but it’s more than wise to exercise caution.

There are a lot of “ifs” and a lot more “buts” to be resolved before a deal like this can be concluded, and I’d strongly advise putting the “cans” on hold until we have at least confirmation of the third stage in the takeover process – the sales purchase agreement.

Do you think there’s substance to the latest takeover rumours on Tyneside? Leave us a comment below and let us know your thoughts. For more like this, visit our football page here and follow us on Twitter for coverage of the Premier League and the rest of the transfer window.

Kieran Harm
Kieran hails from Newcastle-Upon-Tyne and holds a degree in Sports Journalism from the University of Brighton. He covers a range of sports, specialising in football and NFL. Kieran is a long-suffering member of the Toon Army as well as a very proud member of Broncos Country.

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