So what happened to the Takeover?

By Rich Baggott
November 15 2004

News first broke of the latest Takeover (beleived to be the 13th approach in the last 9 months)at the start of the month - Friday became D-Day for the deal to be completed!

Leeds fans woke on Friday to news that broke late on Thursday evening that the Takeover had hit a stumbling block - 'Due Diligence' cited as the cause of the delay.  In real terms,, Due Diligence is whereby investors have total understanding of the clubs current financial position.  Its loans, debt, financial commitments etc..  Without this area being satisfied, it would be an extraordinary gamble for anyone to purchase a club in the state Leeds are in.

Who could be delaying Due Diligence - it could be either party - the seller (or their Solicitors) could provide only partially informative information, the buyer (or their solicitors) could be scrutinizing the information  or demanding further evidence to be provided.  In the case of Leeds United, it was not revealed who or what were he causes of the delays.

Late on Thursday, Seb Sainsbury was quoted as saying he was still confident the deal would be completed - It was going to be an interesting day on Friday!

With both parties observing the confidentiality agreement that had been signed, official word was not forthcoming throughout the morning although the message boards and forums were alive with rumours that the deal was off.  Just after 2pm, Leeds United produced a statement saying that funds had not been transferred and all further negotiations with Nova were ceasing.  In addition, Leeds United confirmed that parallel negotiations had been completed over the past few weeks with Manchester Business man, Norman Stubbs to sell Elland Road on a Buy and Lease back arrangement.  As the next instalment was due on Friday to pay back Jack Petchy, the man who leant the majority of the money to the present board to buy the club, the Board had agreed to sell the ground to an unkown group, rumoured to be headed by Jacob Alder. Who he is, and the finer details are something being looked into by various groups as we speak

Within hours, Seb Sainsbury was speaking out again - He stated that he had been given a 7-day extension to the the deadline - he understood why Elland Road had to be sold and when his consortium took control, they would immediately buy back the club.

Confused yet?  Read on....

Immediately, Chairman Krasner made a second statement stating that there had been no agreement with Sainsbury to extend the deadline and the deal remain 'off'.  There has yet to be a response by Sainsbury.  Further information indicated that Stubbs is prepared to make further investments (quoted £10M) in the club however what this deal will be is yet to be clarified.  It is understood Stubbs has now left the country on holiday so there should be few if any developments in this area for the next week or so.

The situation as we know it is currently:-

-The present Board are stating the deal is OFF.

-Sainsbury is still saying he wants to do business.

-Elland Road has been sold for a believed £8M to a group beleived to be called Barnaways

-The Jack Petchy loan (£9m Outstanding) has been cleared in full

-Further investment is still being discussed with Stubbs and other 'local' businessmen that are described as life long fans

-Leeds United now have no ground or training facilities of their own!

-The current amount of debt is believed to stand at less than £25m - Approximately £10m of this is unscheduled debt - best described as 'arrears' that has to be cleared.

Whether the truth will ever come out around this latest twist in the off the field antics at Leeds United, latest developments have angered, confused and upset fans with a number of unanswered questions:-

-If the Nova takeover was financial unsupported as seems to be claimed by Leeds, why was a respected and well educated businessman like Seb Sainsbury prepared to publicly front up the consortium.  This is a clever and shrewd businessman, not a used car salesman from Holbeck (apologies to any used car salesman in Holbeck reading this) It would be amazing if the consortium was a sham as certain people would like us to believe.

-Why did the Board place such a ridiculous timescale on the deal being completed.  It is widely known that there would have been a £2m penalty to pay if the Petchy instalment was not paid - but what happened to the Thorpe Arch money or the £0.5m recently received from Man City for Fowler.  If the sale of Elland Road had been agreed with Stubbs, Leeds could have easily borrowed £2.5m for a short period against the Stubbs promise of purchase if the takeover failed.

-Why did the board promise, in February, that the Training academy and ground would only be sold as a last resort - we seemed to have hit last resorts within 9 months!!

-Why are the Board refusing to further consult with the Nova consortium if they are stating that the deal can still be completed despite the sale of Elland Road.

Oh, and on other matters, Leeds travel to second placed Ipswich today - kick-off 3pm if anyone is interested!