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New Saudi PIF investment filing points to why they pulled out of Newcastle United takeover

1 month ago
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It is now 22 days since the Saudi PIF announced they had pulled out of the deal to buy Newcastle United.

The  official announcement on behalf of the consortium released on 30 July 2020 (see below).

Whilst Amanda Staveley and the Reuben brothers claimed they agreed with the decision, it was made clear that the Saudi PIF were the ones who had pressed the button.

Far from ending debate, that 30 July 2020 statement has instead intensified the arguments / discussions about what has and hasn’t happened, why the takeover didn’t happen and why no Premier League approval.

However, new information has come to light which points strongly to the Saudi PIF eventual decision to pull out, potentially being decided for reasons that were not to do with the Premier League.

Yes, if the Premier League had approved in short space of time then the takeover would have happened, BUT with this new information to hand, it suggests that long before we got that 30 July announcement the decision had been made by the Saudi PIF to pull out of the NUFC deal.

All hedge funds or institutions that manage over $100m are required by the SEC (Securities and Exchange Commission) to file quarterly reports on their holdings.

The Saudi PIF fall into that category and they have now made public changes to their shareholdings in the second quarter of 2020, this covers changes made between 1 April and 30 June 2020.

The new Saudi PIF SEC (Securities and Exchange Commission) filing, shows that their investment strategy radically changed during this last quarter.

The Saudis got rid of their entire shareholdings in: Facebook, Disney, Marriott, BP, Shell, Boeing, Citigroup, Pfizer, Qualcomm, Broadcom and Bank of America.

Instead they have made massive new / extra investments in real estate and utilities, totalling $4.70billion (approx £3.58billion). As well as this, there have been significant investments in lower risk baskets of stocks and other securities that help increase diversification. In other words, in these virus impacted times in particular, the Saudi PIF selling off stakes in individual higher risk investments / companies, instead going for safer options such as property and utilities, as well as spreading their other stakes / risks over a large number of stocks / companies.

The Saudi PIF dropping Mickey Mouse, as well as their intention to own Newcastle United.

Whilst much was said and written about the Saudis wanting to use NUFC for ‘sports washing’ of the regime, a number of times reports claimed that this wasn’t the case, that it was purely a financial / commercial decision and that the Saudi PIF thought they could make a long-term profit from buying up Newcastle United.

After all, it is worth remembering that the key remit of the Saudi PIF is to diversify away from the reliance on oil revenues, to long-term benefit financially from investments throughout the world, in pretty much every sector of business.

As that statement on the 30 July 2020 stated: ‘Unfortunately, the prolonged process under the current circumstances coupled with global uncertainty has rendered the potential investment no longer commercially viable.’

Maybe amongst all the smoke and mirrors, claims and counter claims, that sentence is the simple truth and the Saudi PIF have no intention now of owning Newcastle United, even if the Premier League suddenly decided to wave any deal through and Richard Masters offered to personally pick them up from the airport.

Statement by PIF, PCP Capital Partners and Reuben Brothers (“the Investment Group”) on Ending Their Bid for Newcastle United FC – 30 July 2020:

With a deep appreciation for the Newcastle community and the significance of its football club, we have come to the decision to withdraw our interest in acquiring Newcastle United Football Club.

We do so with regret, as we were excited and fully committed to invest in the great city of Newcastle and believe we could have returned the Club to the position of its history, tradition and fans’ merit.

Unfortunately, the prolonged process under the current circumstances coupled with global uncertainty has rendered the potential investment no longer commercially viable.

To that end, we feel a responsibility to the fans to explain the lack of alternatives from an investment perspective.

As an autonomous and purely commercial investor, our focus was on building long-term value for the Club, its fans and the community as we remained committed to collaboration, practicality and proactivity through a difficult period of global uncertainty and significant challenges for the fans and the Club.

Ultimately, during the unforeseeably prolonged process, the commercial agreement between the Investment Group and the Club’s owners expired and our investment thesis could not be sustained, particularly with no clarity as to the circumstances under which the next season will start and the new norms that will arise for matches, training and other activities.

As often occurs with proposed investments in uncertain periods, time itself became an enemy of the transaction, particularly during this difficult phase marked by the many real challenges facing us all from Covid-19.

We feel great compassion for the Newcastle United fans with whom we shared a great commitment to help Newcastle United harness its tremendous potential and build upon its impressive and historic legacy while working closely with the local community.

We would like to say that we truly appreciated your incredible expressions of support and your patience throughout this process. We are sorry it is not to be.

We wish the team and everyone associated with it much good luck and success.’

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