A shorter post, after yesterday!

Fears of a debt-funded purchase of Leeds United were ignited by one journalist (some of whose claims about the takeover have already been rubbished by Ken Bates) who told Twitter followers recently that potential buyers GFH Capital had declined to comment when asked if the company planned to fund the purchase of Leeds United with debt.

GFH Capital’s Chief Executive, David Haigh today tweeted:

I see a couple of Journos are back to making stuff up as they go along. What’s that reporters name from harry potter?

While Sun journalist and Leeds fan Andrew Haigh has tweeted that “a source close to the deal tells me there’s zero debt involved in acquiring the club”. Meanwhile the YEP’s Phil Hay, after speaking to somebody with apparent knowledge of GFH Capital’s operations, has tweeted that his contact sees two options: that GFH Capital either has rich backers, or is to purchase the club with a view to selling it for a profit – “flipping” it.

Dubai-based GFH Capital’s recent press release seems to suggest serious plans for the club, rather than a plan to “flip” it to another buyer. GFH Capital’s chief investment officer Salem Patel, for example, has stated that:

We are keen on waking this sleeping giant, building on and forging a sustainable long term future for the club – both on and off the pitch.

He also reveals plans to repurchase Elland Road “eventually”. That is no guarantee of action, but plans certainly seem to be in place for the long term judging by the language of GFH Capital’s press release, while fears about GFH Capital’s ability to bring Leeds United forward, although understandable, are perhaps a little misguided. Current Leeds owner and chairman Ken Bates has granted the group an exclusivity deal to tie up the purchase of Leeds’ parent company, Leeds City Holdings, and Mr Bates has always been very insistant that he will not talk to potential investors until proof of funds are given to him. Nearly a decade of hard work, with pride in running a reasonably profitable club would make it unlikely that he would ruin his legacy by handing the club over to unsuitable owners – just to spite what he calls an “idiot minority”.

Providing GFH Capital hold true to their stated intentions, and Andrew Haigh’s contact is telling the truth, GFHC appear to me to be very capable. The Dubai-based company has managed billions of pounds of investment, while the Twitter presence of board-members David Haigh and Salem Patel, as well as the company itself, also suggests a slightly more cutting edge approach to fan relations – surely a welcome change in direction?

Fans are never going to know everything about a takeover deal before it even exists. With the club renting top quality facilities, owning a top manager, and a squad with bags of potential, perhaps Leeds fans just have to believe that sometimes (just sometimes) things go right for us?

39 Responses

  1. Matthew

    GFH quote that they “hope to take back ownership of Elland Road eventually” completely depresses me! Any serious buyer would buy ER & TA now as part of the take over. Increasing the value of the club obviousaly means developing the stadium and surrounding land (as Bates has started to some extent) and if they can’t afford / don’t want to buy ER then I can’t take this seriously at all. I think GFH are really a broker not the actual buyer but their PR yesterday hasn’t worked for me, it’s actualy put me right off them.

    • marccollins62

      Maybe a certain Mr Bates will not sell ER as part of the deal because he links the rent coming in … not that he owns it of course ;-)

  2. adamgrant8(twitter)

    its just nice to know that we have an end to this shit period in our history.we might not be city or chelsea,but we will be moving forward im sure MOT!

  3. Paul

    I can’t say I am over the moon about the arab spring at Elland Road, but if it rids us of Bates it has to be a good starter for ten if nothing else.

  4. The Northumbrian White LUFC

    The best thing GFHC could & should do is release a firm statement of reassurance in defence of their current position and intentions. It would go a long way to refute any media mischief by any source, silence will only add to the natural feelings of scepticism which I and probably most LUFC supporters understandably harbour from being fed lies and false hope over these past years and months. GFHC, if you are intending to purchase Leeds United in good faith and your desire is to take the club forward positively and not to its detriment then c’mon, SPEAK UP, talk to US, the greatest and best fans in the world. LUFC always & forever!!

    • djedjedje

      Exactly. There’s no reassurance from Haigh via Twitter. He says nothing. Again. Each time they talk and say nothing beyond the bleeding obvious (we want Leeds to be a success, we want Leeds to be in the Premiership, we want to make money from our ownership of Leeds…) the less convincing they are of their seriousness or ability to make this happen.

      • Tyler75

        David Haigh has said (consistently) and adamantly that the reporters are wrong – I’m not sure he’s in a position until the deal is done to release details of how it is to be financed. It may well be the funding is coming from an individual or wealthy group of individuals under the auspices of GFHC – but we’re unlikely to find out until the deal is complete. Personally I’d like Leeds to be a Barcelona type-members set up with significant supporter involvement, but that’s not on the cards. The bottom line though is that any
        buyout will need Premiership football to realise any asset value and therefore the funding needed to achieve it – surely this is a step in the right direction ?

  5. Mike

    With luck all the fears some of have will prove ill founded. However it is worth remembering that the Private Equity was the name created by a clever marketeer to replace the largely discredited 1980’s term Leveraged Buyout (LBO). Mr Haigh ( of the David variety) may well be right that this is not an LBO, afterall the club doesn’t own any assets to raise debt against. The odds are though that debt will be involved somewhere, they might have client investors happy to supply equity capital to whatever vehicle they using, but it is likely the investors will be seeking some sort of shorter term return on part of the money provided. Therefore the club will need to generate excess cash over business expenditure. Accordingly Premier League football is an imperative as is consistent gates of 30,000 plus. Ironically for those who would have Mr Bates hung drawn and quarted it is his extra hospitality boxes that could help generate an increment to gate receipts that will allow the club to pay dividends to shareholders and enable them to satisfy whatever arrangements they have in the Gulf. Hopefully some sort of repayment defferal on these terms, meaning the new Directors are not under pressure to pay dividends allowing the manager to build a team capable not only of obtaining promotion but remaining in the top division. Clearly the interests of GFH, the fans and the ultimate investors are very much aligned so we may well be going in the right direction. But serious risk remains, what if the team does not get promoted? Having no idea what the financial proposals look like it maybe unfair to imply a criticism, but promotion cannot be a certainty what if the club is stuck in the Championship for two more seasons? Hopefully prudent planning has taken this risk into account.

  6. Lewis

    Really enjoyed TSS’s last few articles on the takeover, really summing up what i’ve been thinking myself but in words with the evidence there besides it.

  7. Col

    Quite frankly, I am sick to death of all the half news, rumour and paper talk.
    I, like most people am not interested in any financial Mumbmo-jumbo because most of it goes over my head!
    I gaurentee whoever takes over, can’t be any worse than that twat from Monacco.

  8. Faxman

    Deary me an article quoting Andrew Haigh as a relable source tickles me a plenty. Sun Journalist? give it a break. Forever quoting stuff as his own for articles like this to be published

  9. Max

    Private equity these days works like late stage venture capital – the company in question would have a fund under management and they take money from that and put it into likely investments. On the downside, it’s not an unlimited Man City type amount. On the upside it is likely to be tens of millions, which is enough to get out of this division. They’ll be looking to sell on in a few years time, having grown the value of the company.

    In that light the talk about the profitability of the PE company doesn’t make a ton of sense – if the company is at the start of the fund they wouldn’t have running profits in the conventional sense, and profits within owned companies are likely to be ploughed back into those companies to drive growth.

    I could be wrong but the reporting on GFH doesn’t make a ton of sense in the light of how these companies tend to work. GFH could be unusual and/or some kind of front but the detail and focus in the reporting seems to come from a position of not understanding PE. There would have to be several more layers of detail to the reporting to make it either believable or genuinely concerning.

  10. Big daddy b

    Combing through the jargon where is the cash coming from? One minute Gulf are the go-betweens and next the rhetoric suggests they are the actually buyers? Many fans are (and who can fault them) planning a raid of Barcelona’s playing staff with not a jot of evidence to suggest that any buyer has the funds. Many want shut of Bates ( me included) so badly we don’t care to think about who or what is about to take control..

  11. djedjedje

    Tim, I don’t quite understand why you think Bates wants Leeds to be a success if he sells. The only reason I can think he would is if he still has a financial interest in the club. Other than that his past form is to trash almost every business venture he touches and walks away leaving collateral damage for all except himself and his cronies and couldn’t give a damn about those who lose out.

    The only success he has ever had is with Chelsea – which was a palpable failure until Abramovich saved it and made Bates rich. I’ve never heard Bates say once that the resurgence of Chelsea in the last ten years is down to the foundations he lay (but I could be wrong).

    It strikes me just as likely that Bates would love the new owners to come in and fail. One out of spite, and two because he might be tempted – age and mortality compliant – to come in and fuck us over on the cheap just as he did when he allegedly ‘saved’ us seven odd years ago.

    I just don’t give him much credit as a business man and no credit at all for his morals.

    • TimPM

      I can completely understand what you mean. I just read him differently. I do think he cared deeply about failing with Oldham, I think he wanted Leeds to prove a point when he was forced out of Chelsea, and I think he’ll care deeply about proving the ‘sickpots’ wrong by gaining success via something he can loosely claim as a continuation of his strategy.
      Could easily be wrong of course.


      • djedjedje

        Fair enough. I do entirely agree that he doesn’t want to fail whilst at a club. And had Chelsea collapsed it would have been the death of him (quick, to the time machine!!). Maybe he is still seeking approval from all of us ‘morons’ afterall. Oddbods like him usually do.

        I still think if some dodgy debt leveraged backer came forth and offered him a couple of million more then he’d be very publicly denigrate GFHC as time-wasting shysters and giving them the two fingers. Time will tell lol!

      • mrbigwheels

        Reference the latter comment…. Do you not think that is exactly what he is doing now/on the verge of, etc… hence the posturing of GFHC in the last 36 hours…. Can’t wait for the weekend programme notes.

      • djedjedje

        Yep. I think he’s sniffed a better offer from elsewhere and he’s playing GFHC. Not to say that GFHC won’t become the owners, just I think it is unlikely.

      • Chareose

        Have you guys been on the happy stuff again ??!! A desperate effort to find some scrap of humanity in a meglomaniac who has become a dominating part of a leeds fans psychy ??
        How many times does he need to prove that he doesnt give a flying one about what the fans think???
        Every tyrant has a side that wants to be loved…..you offer Stallin some TLC and end up being rewarded with the GULAG…. The overriding motivation behind Bates tenure at Leeds is to make himself money and hes done that, 10 mill a year including the rent for the stadium he almost certainly owns and a nice 50 mill pay day at the end of it…..
        Yes he undoubtedly wanted to prove his model could work as well but his method of investing what remained of the clubs cash in infrastructure WITHOUT a product is so idiotic and illogical it should be the stuff of legend. And his treatment of the fans is an absolute disgrace…..for that and the disrepute hes brought to the club with his verbal tirades and court cases he should never be forgiven…..

    • John Measures

      I suspect one of Bates’companies owns ER & Thorpe Arch & he wants to continue collecting rent for a few years, so it helps if the club makes enough money to pay him

      • Chareose

        He will put the rent up…..perhaps this has been the crux of negotiations…..

      • TimPM

        The contract doesn’t allow rent to go up on ER (apart from inflation), not sure about TA, and if he did own them and try that I’m sure the new owners could whistleblow and he’d be in trouble. ——————

  12. NTB MOT always

    Is this not the longest takeover quest in History. The so called possible new owners if so determined to gain promotion to the premier league, hello you missed out on the transfer window and early stages of loan window. If I was investing and wanting to move forward and have the fans on my side I would have shown my trump cards a lot earlier.
    Neil and the team have done fantastic, but a little help and finance at the right time, imagine what might have happened.Stop all this half hearted gestures, and show your true colours and intentions. MOT my colours yellow, blue and white.

  13. Irving08

    Sorry Tim, I don’t go along with your reasoning. Bates’ granting of exclusivity may have been his way of getting some funds to help with cash flow problems. GHF’s public statements seem to be a way of trying to drum up funds; and I am not sure that Bates would be concerned about a legacy. He doesn’t strike me as that sort of man. Still I have no illusions about the kind of people who are now in this business, so maybe I shouldn’t expect much.

  14. Bluesman

    So much mystery and suppositon!! I think a deal will be done when it is done. I am not sure who it will be that does it. What ever happens we will be MOT. Good manager and decent side, needs strenghthening and then here come the play offs!!

  15. Will81

    I have the unfortunate pleasure of working for an investment firm in New York and supporting LUFC. I tried to convince my peers & management that LUFC would be a solid investment right now for all the reasons the Doobie gang are quoting! Irrelevant of whether we are a ‘flip’ or a long term investment, to achieve any of this requires us to get the club out of the Championship & back in the money (Premiership)! What this means is that either way we are better off than today

  16. chareose

    Bates owns the stadium…. once leeds gain promotion, the rent and purchasing price will go up….i suspect that ownership of the stadium cash cow has been the crux of the problem during negotiations with the new buyers nervous that Bates will continue to leech off the club and they are right……

  17. leedsdan

    One statement read that following the takeover, they wished to gain promotion by the end of next season. If it goes through soon we can have a push this season if not we have a big season next time. Whatever people think about Bates, and i have to say im not a fan, but he came in at a desperate time, got us out of the red and now we are 1 of only a few clubs making regular profit. It is not in his nature to not get the best deal for the club, even if its just to say he is responsible for rebuilding the great club.

  18. Yorkshirian

    We need flipping. Let them come in, invest and get us promoted. Buy back the ground and get redevelopment agreed. Then please God we are sold to someone sloshing around in their Yorkshire Gold, looking for something fun to do on Saturdays. I cant think of a better outcome.

  19. bd

    just good to see the potential new owners communicating with the fans and letting them know what their plan is for the future is.

    Its also really good to see that GFH have a life long leeds fan, because passion is important in any line of business.

    Next step takeover and some sensible signings please

  20. Old Whitey

    GFH is merely an investment institution, they have little working capital of their own, so what we have here is one or more persons using GFH to retain their own anonimity to invest large sums of money (and i would guess something in the region of £100 million to complete buyout and all the associated bits and bobs as well as getting the players NW needs. If we get into the PL next May then ther’s likely to be another £100 million or more to ensure we actually stay there; thats £200 million spent, now, TV income is £60 million, 10,000 on the gate would add more as would merchandise; however Bates has mortgaged the next five years season ticket sales to fund one of his many white elephants so no extra dosh there. there seems to me to be a helluver lot of luck needed; promotion, good cup runs, european football in year two in the PL: now we’re talking about possible sell on profit; but then which clubs, if any have actually made a profit when bought out recently? not even MUFC can manage debt as all their profit goes to manage the Glazers huge debt mountain. On the bright side Bates goes out of our lives and we will get investment funds to get us up to the big time. MOT

  21. anythinggoeshere

    If they are true to their word about a sustainable future for Leeds United, then I would prefer them as owners. What they say also proves that Bates has done alot of good things for Leeds by improving the infrastructure of the club etc, hopefully they will continue this work, as well getting us back to the premier league. But when you look at how competitive the premier league has become over the last decade, it will be a real dog fight for us to stay up permanently. Clubs that are already up will already have an significant advantage over us in money and resources

  22. Ron

    Tim, have you heard anything about the striker we bid for on loan?? We were supposed to hear something on Saturday.


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