Scratching Shed 14/2/13
GFH Capital could be set to net a quick £7m by “flipping” Leeds United Football Club according to the latest takeover rumours.
Flipping is a term used to describe purchasing a revenue-generating asset and quickly reselling (or “flipping”) it for profit.
When GFH completed the takeover of Leeds United in December, it’s believed the fee paid up front was around £17m, with subsequent payments to be made at a later date.
If GFH Capital are to sell Leeds United to those reportedly interested in the club, it’s likely that said deal would remain in place.
The currently interested party are said to have made a pro rata offer of £24m and are looking to take an immediate stake of 51% with a phased buy-out of further shares thereafter.
Due to pending payments to the previous ownership, which are presumably based upon the club achieving certain goals (such as promotion) and would pass on to the new owners (or be shared by new shareholders), it’s difficult to put an actual valuation on the club, though the media reports of £50m when GFH originally took over from Ken Bates are starting to sound a little far-fetched.
Confirmed interest in the club came via a statement on Leeds United’s official website in which GFH said they hadn’t accepted any offer for the club but were interested in additional investment.
The interested parties are believed to include renewed interest from a Saudi Arabian group who were rumoured to be preparing a bid last year before GFH completed their deal with Ken Bates. Alongside them is a Yorkshire consortium most likely headed up by former Leeds United Director and Hull City Owner/Chairman, Adam Pearson.
David Haigh and Salem Patel arrive back in the UK today ahead of Sunday’s FA Cup clash against Manchester City.
The last time the two sides met in the FA Cup, City were enjoying life back in the Championship following promotion from League One while Leeds were flying high in the Premier League. How times have changed.