Liverpool's board split as Hicks and Gillett make last bid to keep control
Published 06/10/2010 | 01:56
Liverpool owners Tom Hicks and George Gillett have attempted to remove two senior figures from the club's board of directors on a day that also saw them receive two new bids that would wipe out the Premier League club's debts.
The last-ditch struggle by Liverpool's owners Tom Hicks and George Gillett to hold onto the club turned into all-out civil war last night when it was revealed that the Americans had sought to oust the other members of the board, just as they were poised to accept two offers which would have forced the two proprietors out.
The club took the extraordinary step of declaring through its own website that the two bids it has received – one of them from US sports group New England Sports Ventures, owners of the Boston Red Sox; the other from Asia – were "excellent financial offers" which would repay all the club's debt and enable the construction of the new stadium which is critical to the club's future.
But as of yesterday afternoon Hicks and Gillett, whose contribution to Liverpool's London board meeting came via a conference call, possibly from Texas, considered managing director Christian Purslow and commercial director Ian Ayre to be suspended. The Americans are attempting to replace these two individuals, who with executive chairman Martin Broughton want one of the bids to be accepted, with Mack Hicks, Tom Hicks' son, and Lori Kay McCutcheon, a vice-president at Hicks Holdings.
The Independent understands that the non-American board members believe that Hicks and Gillett do not have the right under the Companies Act to remove Purslow and Ayre. The international law firm Slaughter & May, engaged by Broughton in June, had already begun work last night to prove this point. That legal battle is critical.
Broughton believes that if his lawyers can establish the illegality of the suspensions, then they also have the power to force through whichever of the two new bids they consider the best. Both bids, which are believed to value the club in the region of £300m, would mean Hicks and Gillett walking away with nothing in return for the investment they have put into the club.
Hicks and Gillett said in a rare joint statement early today: "The owners have invested more than $270m in cash into the club, and during their tenure revenues have nearly doubled. There is no change in our commitment to finding a buyer for Liverpool Football Club at a fair price that reflects the very significant investment we've made."
All may become clearer in the next few days. But if the legal argument is lost, the Americans will be able to block the new bids and the club's destiny will then fall into the hands of its bankers Royal Bank of Scotland (RBS), whose £273m of loans and fees owing is due for refinancing by 15 October.
One option open to RBS is to forecloseon the Americans. This is a route the bank have not been keen on though there was a growing feeling around Anfield last night that the presence of two imminent prospective buyers – who have undertaken all the due diligence needed – may make RBS more willing to foreclose. How the club might therefore be handed over is difficult to ascertain but the Americans' seem to be spiralling through their Anfield endgame. Last night's dramatic developments coincided with a powerful viral film, Dear Mr Hicks, produced by the filmmaker Mike Jefferies.
Gillett was said to be away from his office "travelling" late last night, though it is understood that he and Hicks were together when they established contact with the board meeting by telephone yesterday afternoon.
Broughton appears to consider the two latest bids far more credible than those which surfaced in late summer amid much publicity. The fact that New England Sports Ventures and the unnamed second prospective buyer have remained below the radar has reinforced their credibility. A source very well connected to Liverpool described New England to The Independent as a "quality" outfit which had been on the scene for some time. Both prospective buyers had waited until the last moment to approach Hicks and Gillett, with Broughton expecting this response. But neither could have expected this state of civil war. "It's chaos, with injunctions flying everywhere," one source said.
NESV is part-controlled by John W Henry, a futures trading adviser and dollar billionaire whose fortune has been estimated at more than $600·million. Television producer Tom Werner is also a shareholder, as is the New York Times Company.