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Newcastle takeover – Amanda Staveley, Mike Ashley and a Sports Direct red herring

2 years ago
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There’s a very nice law student down in Bristol called Tom Benbow, who is a fan, and is writing a Twitter blog about the Newcastle takeover.

He produces good information and digs away at public sources and it is admirable in these respects…but the lad is infuriating.

Anyway, I am writing this piece on the night of the Fourth Round draw and I am feeling a bit bruised that a much improved attacking display against Luton has not received a better reward than a likely away tie at Chelsea.

But this disappointment would not by itself have been enough to induce me to write about the Newcastle takeover, or the lack of it.

I had pretty much vowed not to utter a word on the subject because only Amanda and Mike really know what is in their heads. It is what is in their heads that will determine whether or not this takeover goes ahead. In Amanda’s case it is also a question of what is in the heads of some very rich people in Saudi Arabia, if the rumours about who she represents are true.

So nobody really knows anything. Certainly I know nothing. But the point is that Tom Benbow knows nothing either.

To his credit he is merely reproducing publicly available information and drawing conclusions which he is plainly entitled to draw, though his conclusions do not flow directly from these pieces of information.

The problem is, though, that some fans are intimidated by what they are calling ‘white collar’ jargon and City concepts and at the same time plainly trusting in Tom to provide explanations that fulfil their faith in their own wishful thinking.

I have read Tom’s stuff and have read pretty much every rumour, piece of speculation and newspaper effusion. For what it’s worth (virtually nothing) I am pretty sure a takeover is being discussed, and is still being discussed. Amanda has signed a Non Disclosure Agreement which stops her from saying anything she has learned about the club during her inspection of the books.

It doesn’t stop her saying something like ‘Hey boys, I’m fed up with Mike, and won’t be buying the club any more.’ She could say that, and she hasn’t, which I take to be an optimistic sign.

But law student Tom goes beyond explaining the application of Company Law to his readers. He concludes his account of Sports Direct motions with an assertion that it can’t just be a coincidence that Sports Direct is giving itself authority to buy millions of its own shares, when these shares it is giving itself permission to buy would cost around £300m, which of course sounds rather like the price of Newcastle United.

Well, Tom, I think it could easily be a coincidence. Just because Sports Direct can suddenly buy its own shares doesn’t mean Mike is about to sell the club. Conversely, just because his holding company MASH may be raising, perhaps coincidentally, or perhaps not, a sum adjacent to £300m by selling the Toon, has got nothing to do with Sports Direct whatever.

And most particularly, if MASH (a privately owned company controlled by Mike) went ahead with a sale of Newcastle United to Amanda he would NOT be entitled to stick all that dosh into Sports Direct, a public company regulated by the City and advised by an army of cerebral lawyers.

Obviously an investor can buy shares in a public company like Sports Direct, but they buy shares through intermediaries, the transaction is regulated, and is recorded by the Stock Exchange. Such transactions are highly price sensitive. If someone buys a lot of shares in a public company the price goes up, and fortunes are made.

So there is nothing to stop MASH using all this (imaginary) cash from Amanda to buy shares in Sports Direct in the proper way. But the whole point of the resolutions painstakingly enumerated by Tom in Bristol is that it won’t be MASH buying these shares. It will be Sports Direct buying its own shares. I don’t know why Mike is doing this, but that’s not the point. Tom’s coincidence disappears right there. The MASH money (if it transpires) cannot be used for the Sports Direct investment.

Let me be quite clear. I think Amanda is still trying to buy the club. From what I read, her valuation is around £50m south of Mike’s. That is the real problem. It is in part a down payment on the discount that Amanda wants Mike to give her in the event Newcastle are relegated. In the Championship Newcastle would be worth (according to journalists) little more than the outstanding loan account in MASH’s favour. But Mike is not giving her any such discount.

As the season goes on, the gamble on whether or not Newcastle are going to stay up becomes progressively easier to read. It becomes, effectively, less and less of a gamble.

But whether or not Amanda will need to be absolutely sure Newcastle are staying up, and absolutely sure Rafa will be sticking around, before she commits to a purchase is a decision that resides in her head, and in nobody else’s. Certainly not in mine. Even in those circumstances would she agree to Mike’s terms? I don’t know.

But a sale won’t be going ahead this week, for all that Mike is back from his holidays.

Let’s hope I’m wrong, and let’s hope dear old Tom down in Bristol is right. Dry January, in that event, will be greatly foreshortened.
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