Together Leeds can provide fallback position for Cellino
Yorkshire Evening Post 4/4/14
by Phil Hay
Together Leeds might well be Massimo Cellino’s insurance policy; the plan B for a man who will need a fallback if the walls come down around his bid to buy Leeds United.
Two months ago the Italian’s takeover was staunchly opposed by Together Leeds, a group who claimed their proposal and money offered United more security than Cellino could give them, but on Monday they resolved to approach him and ask if a joint partnership at Elland Road would suit the best interests of everyone.
Mike Farnan, the man fronting Together Leeds and the face of the consortium since they bid for United back in November, believes representatives of Cellino are receptive to the idea of working together.
That claim contradicts the impression of Cellino as a lone, singular operator – the man in charge of Cagliari since 1992 – but negotiations with Together Leeds have given him options: a prospective partner if his takeover proceeds and a group to sell shares to if his takeover doesn’t.
The share purchase agreement for a 75 per cent stake in Leeds – signed by Cellino and Gulf Finance House in January – makes it clear that Cellino and his company, Eleonora Sport, has control of that equity, despite the fact that his buy-out has been rejected by the Football League and is now subject to an independent appeal.
The 57-year-old paid £6m to seal his deal with GFH two months ago and is due to complete payment to GFH in December of this year. He agreed to take on and manage substantial amounts of short-term and long-term debt, amounting to more than £20m.
At the time, he and GFH also put in place two surprising clauses – the first stating that Eleonora Sport would effectively bankroll United’s operations for six months from the end of January and the second giving Cellino the right to decide who his 75 per cent stake should be sold to in the event that his own takeover fell through.
That clause is understood to remain active until the end of this month and gives Together Leeds an avenue to exploit. Together Leeds have tried and failed over several months to establish constructive talks with GFH about the sale a majority stake to them.
GFH resisted those advances having rejecting a bid from Together Leeds in November, and appeals to Hisham Alrayes – the Bahraini bank’s chief executive – for dialogue two weeks ago came to nothing. GFH is committed to Cellino’s takeover and holds the view that Together Leeds lack the money to match his terms.
Behind Farnan, Together Leeds have a number of representatives including Welcome to Yorkshire chief executive Gary Verity – a man who Farnan sees as United’s next chairman – and ex-Hull City chairman Adam Pearson.
Frank Devoy, a close associate of Farnan’s, led the approach to Cellino’s camp on Monday. Farnan, who is yet to reveal exactly where the consortium’s funding is coming from, says Cellino is interested in working alongside them.
“We’re open to different options and that’s one of them,” he said. “They’ve been receptive to it. It’s very possible.”
Under the terms of Cellino’s buy-out, GFH is due to retain 10.46 per cent of shares in Leeds. Bahrain’s International Investment Bank (IIB) and Envest Ltd – the firm owned by United chairman Salah Nooruddin – will keep more than seven per cent each.
by Phil Hay
Together Leeds might well be Massimo Cellino’s insurance policy; the plan B for a man who will need a fallback if the walls come down around his bid to buy Leeds United.
Two months ago the Italian’s takeover was staunchly opposed by Together Leeds, a group who claimed their proposal and money offered United more security than Cellino could give them, but on Monday they resolved to approach him and ask if a joint partnership at Elland Road would suit the best interests of everyone.
Mike Farnan, the man fronting Together Leeds and the face of the consortium since they bid for United back in November, believes representatives of Cellino are receptive to the idea of working together.
That claim contradicts the impression of Cellino as a lone, singular operator – the man in charge of Cagliari since 1992 – but negotiations with Together Leeds have given him options: a prospective partner if his takeover proceeds and a group to sell shares to if his takeover doesn’t.
The share purchase agreement for a 75 per cent stake in Leeds – signed by Cellino and Gulf Finance House in January – makes it clear that Cellino and his company, Eleonora Sport, has control of that equity, despite the fact that his buy-out has been rejected by the Football League and is now subject to an independent appeal.
The 57-year-old paid £6m to seal his deal with GFH two months ago and is due to complete payment to GFH in December of this year. He agreed to take on and manage substantial amounts of short-term and long-term debt, amounting to more than £20m.
At the time, he and GFH also put in place two surprising clauses – the first stating that Eleonora Sport would effectively bankroll United’s operations for six months from the end of January and the second giving Cellino the right to decide who his 75 per cent stake should be sold to in the event that his own takeover fell through.
That clause is understood to remain active until the end of this month and gives Together Leeds an avenue to exploit. Together Leeds have tried and failed over several months to establish constructive talks with GFH about the sale a majority stake to them.
GFH resisted those advances having rejecting a bid from Together Leeds in November, and appeals to Hisham Alrayes – the Bahraini bank’s chief executive – for dialogue two weeks ago came to nothing. GFH is committed to Cellino’s takeover and holds the view that Together Leeds lack the money to match his terms.
Behind Farnan, Together Leeds have a number of representatives including Welcome to Yorkshire chief executive Gary Verity – a man who Farnan sees as United’s next chairman – and ex-Hull City chairman Adam Pearson.
Frank Devoy, a close associate of Farnan’s, led the approach to Cellino’s camp on Monday. Farnan, who is yet to reveal exactly where the consortium’s funding is coming from, says Cellino is interested in working alongside them.
“We’re open to different options and that’s one of them,” he said. “They’ve been receptive to it. It’s very possible.”
Under the terms of Cellino’s buy-out, GFH is due to retain 10.46 per cent of shares in Leeds. Bahrain’s International Investment Bank (IIB) and Envest Ltd – the firm owned by United chairman Salah Nooruddin – will keep more than seven per cent each.
