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Newcastle United takeover : Mike Ashley considering whether to accept £300m offer – Report

1 year ago
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Thursday night has brought breaking news of a reported new Newcastle United takeover offer.

The exclusive comes from The Mail who say that Peter Kenyon is behind this offer and he has teamed up with GACO Sports who are based in Florida.

On the GACP Sports official website they describe themselves as follows:

‘GACP Sports makes influential minority and controlled investments in outstanding sports-related businesses that have strong brand equity.

The firm is comprised of experienced private equity professionals as well as sports industry executives who bring expertise in the acquisition and management of sports and sports-related franchises.’

GACP bought Bordeaux for £66m last year (although the ownership split is actually 14% GACP and 86% King Street) and the report claims that they have made a £300m offer to buy Newcastle United.

The Mail say that the offer is to pay £125m up front and then the other £175m over three years and in that time Mike Ashley would keep his Sports Direct advertising at St James Park etc and receive 3% interest until the final payment is made.

The newspaper say they have seen the investment brochure that the company are said to have put out to potential investors and that it talks  of Steve Bruce having ‘unparalleled success in Europe’…it all sounds a bit amateurish/making it up as you go along, as clearly it appears that the brochure has been put together when Rafa Benitez was still here and then Steve Bruce’s name substituted without changing the text.

This ‘new’ brochure:

On 29 September 2018 just hours before Newcastle played Leicester at home, Sky News announced that Peter Kenyon was in talks to buy Newcastle United. That eventually ended up in a position in January 2019 (see below) where Peter Kenyon was looking to raise the necessary cash by giving investors the chance to invest anything from as low as a million each.

How true/feasible this latest claimed Newcastle United takeover offer is, remains to be seen.

The Mail say that Mike Ashley has said he will give a response as to whether he will accept the offer within 10 days, which takes us up to the home game against Man Utd.

No doubt many/all Newcastle fans will be sceptical, no doubt many commenting ‘Oh, it’s that time of year.’

The idea of a buyout where they can’t afford the full purchase price up front and the Sports Direct adverts stay up for at least another three years, isn’t exactly what most of us were dreaming of.

Whilst of course just like last September’s Kenyon takeover story and the Amanda Staveley one in October/November 2017, it is surely ridiculous to think that in the middle of a possible relegation season, somebody would risk paying top dollar for a club which could half in value within months of them buying it, if Newcastle went down.

The logic being that surely if anybody is/was going to buy NUFC, it would make sense for it to be in the summer.

The Mail report – 26 September 2019:

Peter Kenyon has launched a fresh bid to buy Newcastle United with a new consortium, who have offered to pay Mike Ashley £125million up front to take control of the club.

The former Chelsea and Manchester United chief executive has teamed up with Florida-based GACP Sports, who already own French club Bordeaux, to offer a total package of £300m for Newcastle with a pledge to establish them as one of the top 10 clubs in the Premier League.

Sportsmail has seen a 46-page brochure produced by Kenyon and GACP Sports detailing their plans for Newcastle, which they have been working on for several months.

The group are understood to have secured sufficient investment to fund a £300m buyout paid over three years, with an additional £50m to be injected into the club immediately to cover operational costs. The offer has been lodged with Ashley, who has indicated that he will provide a definitive response within the next 10 days.

Kenyon’s revised bid follows a previous takeover attempt with a different group of American investors which was not successful earlier this year. Under the terms of the new offer seen by Sportsmail, GACP would make a down-payment of £125m to take control at St James’ Park, with a further £175m to be paid via a so-called seller’s note over three years. Ashley would earn three per cent interest on that sum each year.

In addition, Ashley’s company Sports Direct would be granted signage and advertising rights at St James’ Park until the final instalment and interest has been paid. In the brochure, Kenyon and GACP outline their ambitions for Newcastle, which they describe as an ‘undervalued brand’ that can be transformed into ‘one of the top 10 clubs in England’.

Kenyon would become chief executive officer of Newcastle if the offer is accepted, working with GACP’s partners Joseph DaGrosa Jnr, Hugo Varela and David Neithardt, who are also involved at Bordeaux.

In July 2018, GACP, the sports investment arm of Florida-based private equity firm General American Capital Partners, paid £66m to acquire Bordeaux, who struggled in the first season of their ownership before finishing 14th in Ligue 1.

DaGrosa is the president of Bordeaux and Varela is used by the French club as a sports consultant. Kenyon’s group would inject £50m immediately into Newcastle on top of the purchase price and have produced detailed plans.

The group ‘plan to support current manager Steve Bruce’ despite his unpopularity with fans, who may be alarmed at GACP Sports’ claim that the 58-year-old has had ‘unparalleled success in Europe.’ Bruce’s European experience as a manager amounts to two ties in the qualifying rounds of the 2014-15 Europa League with Hull City.

In addition to backing Bruce, GACP Sports plan to ‘hire a leading head of recruitment to help identify top talent from across Europe’. Their long-term strategy is to ensure they are ‘positioned to sell top talent for significant sums, allowing for continued substantial reinvestment into the squad’.

The Mag – 11 January 2019:

Friday morning sees a Newcastle United takeover update report regarding Peter Kenyon.

This one very much falling into the ‘believe it or not’ category.

The ‘exclusive’ claims that Peter Kenyon is now looking for smaller investors to make up the alleged shortfall in cash that he needs to buy Newcastle United.

The report states that the former Chelsea and Man Utd Chief Executive is inviting investors to be part of the buyout if they can come up with £1m.

The silly season just got a whole lot sillier.

This whole thing just sounds more and more ridiculous by the day, it is almost as though somebody is running a PR campaign of planted/’leaked’ stories in the media that wants to make an alternative potential owner sound even worse than Mike Ashley.

I just wonder who could possibly benefit from putting out such stories…

Already people have reacted on social media saying what is the point of this potential Peter Kenyon buyout, if he can’t even raise the money to buy the club, never mind have money to invest in helping to turn around everything that is wrong at NUFC, on and off the pitch?

The ‘exclusive’ (see below) in The Sun also makes that point.

They also say that Kenyon’s supposed plan/proposal would also mean he wouldn’t have the full purchase price ready either and would pay by instalments.

Are we really supposed to believe all this?

Unless it was a money no object part of a much bigger plan thing like what has happened at PSG and Man City, then buying a club mid-season that is in real danger of relegation, wouldn’t sound impossible. They could see a relegation as just a temporary obstacle that would just delay them in moving the club towards success, using their massive wealth.

However, that is clearly not the case here, if you really believe Mike Ashley is interested in selling Newcastle United and you believe Peter Kenyon is struggling to raise the money from investors. If we did accept these things as true, then you have to bear in mind that people would only ever be investing in the hope of making a profit in X years time.

On that basis it is impossible to see any consortium and especially smaller investors, risking their money at this point, in what is basically a no-win gamble.

Say that you believe all the previous reports on Mike Ashley willing to sell, but only at his £300m valuation, AND you believe Peter Kenyon is leading a bid and welcoming all levels of investors…

Why on earth would they risk money at this point?

If the club stays in the Premier League it would still be valued at £300m (how can you believe it could be more than that when you look at how much work needs to be done???).

If the club is bought now for £300m and it ended up being relegated, then it would be worth probably around £150m-£200m. So the imaginary Peter Kenyon millionaire club investors, would immediately become half a millionaire (value) investors.

For what it is worth, I think it is laughable the idea that any takeover is going to happen during this season, if ever…

The Sun:

‘Desperate Peter Kenyon is appealing to investors to back his Newcastle takeover attempt – by offering them a minimum buy-in of just £1million.

The ex-Manchester United and Chelsea chief executive is still searching for the £300m needed to complete his purchase of the Toon.

And SunSport has learned that Kenyon is so anxious he is now doing a whip-round of anyone able to cough up a seven-figure sum.

Even then, the British businessman would only be able to pay Toon owner Mike Ashley in instalments staggered over the rest of the year.

But Kenyon is buoyed by Ashley viewing him as the “best fit” to buy the club.

And he is determined to get a deal over the line by any means possible, having spent weeks looking over Newcastle’s books and working with lawyers.

Kenyon’s struggle to meet Ashley’s asking price, however, does raise doubts about his suitability for St James’ Park.

When Ashley put Newcastle up for sale in October 2017, he claimed a new owner must have the investment necessary to take the club to the “next level”.

But it remains to be seen how Kenyon will find the money needed to strengthen Newcastle’s squad, even if he manages to successfully buy out Ashley.

In the meantime, Ashley has no intention of providing Rafa Benitez with any meaningful money to purchase players in the transfer window.

The Toon boss, who is likely to leave when his contract expires in the summer, expects to be left looking for loans and bargain deals at the end of the month.

Newcastle have won only one of their last nine games in all competitions.’

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