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Just maybe the Saudi PIF Newcastle United takeover might not be dead

1 year ago

Is the Amanda Staveley, Reuben Brothers, PIF Newcastle United takeover dead?

Probably, but maybe, just maybe, not!

The Toon faithful and many more besides, rose to Amanda Staveley’s call to arms, forcing Richard Masters and his cohorts to respond to the many and various vexed questions about their handling of the proposed Newcastle United takeover.

Whilst the answers weren’t exactly fulsome, they appeared to leave the door open which, at the very least, begged a response from the consortium.

However, weeks have passed and nothing has been said. Amanda, the deal maker, has gone quiet and fans are asking why?

Well, Staveley and the Reuben Brothers stake in the consortium amounts to 20%. The majority balance of 80% is with the Saudi PIF and they hold the cards.

Most folks have no idea about the inner workings of the Kingdom of Saudi Arabia’s business institutions. I can tell you, from extensive experience, that they are cumbersome and sophisticated, especially when it comes to major financial transactions involving public money.

Before retiring a few years back, l was Commercial Director of a very large engineering company. We did a lot of work in the Middle East and more specifically for Saudi Aramco. That’s how l became familiar with their heavily bureaucratic decision making processes.

What has all of this got to do with NUFC you might ask?

Well, the PIF is a state owned enterprise, just like Saudi Aramco, and l would be very surprised it they were run any differently, especially when it comes to strategic decision making.

I can make the point by referencing the example of a very large project we carried out in the Kingdom, a giant gas plant valued at about one billion dollars in today’s prices. The turnkey design and build project (which spanned 4 years) ran into commercial difficulties which took years of wrangling to resolve. Our dispute was eventually settled amicably for many 10s of millions of dollars. The final approval to settle those claims came from Aramco’s Strategic Review Committee (SRC) – a committee made up of a number high ranking Directors, Business Unit Leaders and Department Heads whose job it was to challenge proposals brought forward within the company before either approving or rejecting them.

I came to know that the SRC was the body formally delegated with authority to make important business decisions related to major capital expenditures and that such matters were decided by that committee alone, after reviewing structured business case presentations.

SRC meetings were arranged on an adhoc basis, it was difficult for outsiders to find out when they would take place. Worse, executives had busy diaries so attendees weren’t always the same individuals. Outcomes were difficult to predict and decisions might be deferred for more information and a follow up review at a later date.

Having a good internal sponsor (like the Head of the Organisation) would undoubtedly help the decision making process but senior officials were naturally reticent to stick their heads above the parapet for fear of being perceived as having some private conflicting interest.

If the Aramco process is anything to go by, l believe that each phase of the NUFC takeover debacle would fall under the auspices of a formal review and that applies to any decision to resurrect the bid and, as noted above, that could take several weeks, even months to conclude.

My guess is that Amanda Staveley and the Reuben Brothers’ influence on the PIF’s equivalent of Aramco’s SRC will be very limited. They are likely to be as much in the dark as we are and that could be why they have had so little to say.

Whilst l fear that PIF’s interest in NUFC might well have waned, l’m hoping that it’s not dead for sure because the fat [SRC] lady hasn’t sung yet.


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