Guardian Unlimited Football | News | Leeds board split over Stubbs bid

Leeds board split over Stubbs bid

Matt Scott
Saturday November 6, 2004
The Guardian

The bid to take over Leeds being prepared by Norman Stubbs's consortium may fail because it does not include a financial incentive for the current board.
Stubbs is understood to have raised £10m and the proposed sale and leaseback of the Elland Road stadium is expected to bring in a further £15m. However, his backers insist all monies must be directed towards the continued survival of the ailing club rather than rewarding those directors under whose stewardship debts have been reduced from £104m to slightly more than £30m.
The current Leeds chairman Gerald Krasner is understood to be content with Stubbs's offer but his view is not shared by two of his fellow directors, who are pushing exclusively for Sebastian Sainsbury's Anglo-American consortium. Sainsbury initially offered two board seats to the incumbents and a £2m sweetener to the current directors, a proposal which is the subject of further negotiation.
However, in taking out £4.75m in directors' loans which helped facilitate the initial Adulant Force buy-out of the club, the board used their homes and businesses as security. Should both current takeover bids fail, directors stand to lose their estates if the club goes under.
With Leeds only four points off the relegation places in the Championship, refinancing would be impossible and analysts project administration will ensue next March unless £13m outstanding to the former Watford chairman Jack Petchey and £9m owing to the Inland Revenue is paid.
If such estimates are correct, those directors who would snub Stubbs are effectively gambling with their livelihoods. This has caused a series of board squabbles.
But there were encouraging signs yesterday that Sainsbury's bid is inching forward. "We have had certain paperwork lodged with us that has progressed matters," said Krasner. "But nothing will happen this side of the weekend."
Meanwhile, Leeds have signed Sunderland's midfielder John Oster on a month's loan and he goes straight into the squad at Preston today.

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