Times Online - Sunday Times
Post Office chief offers lifeline
David Bond
LEEDS UNITED are considering a last-minute rescue proposal from Royal Mail chairman Allan Leighton which, if accepted, could save the stricken club.
The bid, submitted to Leeds chief executive and temporary chairman Trevor Birch late on Friday, is not a formal takeover offer. But Leighton is understood to have secured the backing of a consortium of City figures prepared to inject funds into the club to settle its £80m debts and keep it going.
With tomorrow’s deadline set by the club’s creditors fast approaching, Leighton’s consortium made its move after a separate offer from lifelong Leeds fan Sheikh Abdul Mubarak Al-Khalifa, a member of the Bahraini royal family, failed to materialise on Friday morning. He is still promising to deliver a takeover deal, but directors at the club are sceptical.
“Allan Leighton’s offer is now in,” said a source. “It’s the only one on the table.”
Birch has secured an extension to the standstill agreement with creditors due to expire tomorrow, until the end of January. An announcement to the Stock Exchange will be made tomorrow morning.
Yesterday’s 2-1 defeat at Southampton will not help negotiations between the Leighton consortium, Birch and the club’s creditors. Leeds are now rooted to the bottom of the Premiership, and any potential investor knows relegation to the First Division will mean an instant drop of £20m in income.
The Leighton offer is complicated and will not involve any purchase of the company’s shares. Instead, the former deputy chairman at Elland Road, who resigned from the board to try to put together a rescue package last year, has come up with a proposal thought to be worth about £15m to pay off the plc’s debt in return for ownership of the football club.
The club owes £60m on a 25-year bond, securitised against the value of Elland Road and season ticket sales, and £20m to a leasing company, Registered European Football Finance Ltd (REFF), which lent money to Leeds to buy players such as Mark Viduka.
Leighton’s consortium is hopeful that Birch can secure an agreement with creditors to settle those debts in the next few weeks.
Birch is aware that uncertainty over the club’s Premiership status will make it hard to do a deal before May, and he will hold further talks this week with the club’s players and their union about implementing wage deferrals.
He is confident of winning the players’ backing to at least accept a deferral to the end of the season, which will free up enough money to prevent the club from sliding into administration.
He also has the option of selling players such as Viduka, Alan Smith and goalkeeper Paul Robinson. Because £6m is owed to REFF on Viduka, the club would be unlikely to receive any cash from selling the Australian striker, but would benefit by getting his annual £3m salary off the £50m wage bill. Any sale of Smith and Robinson, both homegrown, would provide much-needed cash.
Viduka has been linked with moves to Manchester United, Middlesbrough and Newcastle, while Robinson is thought to be a target for Tottenham. Selling Smith, seen by Leeds fans as the last jewel in the crown, would be a blow to the club’s morale but might be necessary if administrators eventually take control.
Birch said: “Selling players is the last option and we have not had any approaches from anyone. If the players agree to deferrals, then that will give us a better chance of staying up. I think the players seem to be genuinely caring about what happens. There’s quite a good attitude.”
John McKenzie, the former Leeds chairman who resigned on December 23 to concentrate on attracting financial backers in China and the Far East, has been in Shanghai meeting potential partners.
Despite hopes that a Chinese tycoon might emerge to rescue the club, that will not happen. McKenzie’s contacts are interested only in establishing media and marketing partnerships once the long-term future of the club is secure.
That all hinges now on Leighton’s offer, the details of which will be put together in the next few days.
As deputy chairman during the profligate era of Peter Ridsdale, Leighton is seen by many fans as being equally culpable for the club’s financial collapse.
In addition to his role at the Royal Mail, Leighton, 50, is also a director of Sky, building giant Wilson Connolly and high-street retail chain Bhs. He is acutely aware that allowing Leeds to go into administration could ruin his reputation as one of the City’s highest flyers, earned from his days as chief executive of Asda.
Post Office chief offers lifeline
David Bond
LEEDS UNITED are considering a last-minute rescue proposal from Royal Mail chairman Allan Leighton which, if accepted, could save the stricken club.
The bid, submitted to Leeds chief executive and temporary chairman Trevor Birch late on Friday, is not a formal takeover offer. But Leighton is understood to have secured the backing of a consortium of City figures prepared to inject funds into the club to settle its £80m debts and keep it going.
With tomorrow’s deadline set by the club’s creditors fast approaching, Leighton’s consortium made its move after a separate offer from lifelong Leeds fan Sheikh Abdul Mubarak Al-Khalifa, a member of the Bahraini royal family, failed to materialise on Friday morning. He is still promising to deliver a takeover deal, but directors at the club are sceptical.
“Allan Leighton’s offer is now in,” said a source. “It’s the only one on the table.”
Birch has secured an extension to the standstill agreement with creditors due to expire tomorrow, until the end of January. An announcement to the Stock Exchange will be made tomorrow morning.
Yesterday’s 2-1 defeat at Southampton will not help negotiations between the Leighton consortium, Birch and the club’s creditors. Leeds are now rooted to the bottom of the Premiership, and any potential investor knows relegation to the First Division will mean an instant drop of £20m in income.
The Leighton offer is complicated and will not involve any purchase of the company’s shares. Instead, the former deputy chairman at Elland Road, who resigned from the board to try to put together a rescue package last year, has come up with a proposal thought to be worth about £15m to pay off the plc’s debt in return for ownership of the football club.
The club owes £60m on a 25-year bond, securitised against the value of Elland Road and season ticket sales, and £20m to a leasing company, Registered European Football Finance Ltd (REFF), which lent money to Leeds to buy players such as Mark Viduka.
Leighton’s consortium is hopeful that Birch can secure an agreement with creditors to settle those debts in the next few weeks.
Birch is aware that uncertainty over the club’s Premiership status will make it hard to do a deal before May, and he will hold further talks this week with the club’s players and their union about implementing wage deferrals.
He is confident of winning the players’ backing to at least accept a deferral to the end of the season, which will free up enough money to prevent the club from sliding into administration.
He also has the option of selling players such as Viduka, Alan Smith and goalkeeper Paul Robinson. Because £6m is owed to REFF on Viduka, the club would be unlikely to receive any cash from selling the Australian striker, but would benefit by getting his annual £3m salary off the £50m wage bill. Any sale of Smith and Robinson, both homegrown, would provide much-needed cash.
Viduka has been linked with moves to Manchester United, Middlesbrough and Newcastle, while Robinson is thought to be a target for Tottenham. Selling Smith, seen by Leeds fans as the last jewel in the crown, would be a blow to the club’s morale but might be necessary if administrators eventually take control.
Birch said: “Selling players is the last option and we have not had any approaches from anyone. If the players agree to deferrals, then that will give us a better chance of staying up. I think the players seem to be genuinely caring about what happens. There’s quite a good attitude.”
John McKenzie, the former Leeds chairman who resigned on December 23 to concentrate on attracting financial backers in China and the Far East, has been in Shanghai meeting potential partners.
Despite hopes that a Chinese tycoon might emerge to rescue the club, that will not happen. McKenzie’s contacts are interested only in establishing media and marketing partnerships once the long-term future of the club is secure.
That all hinges now on Leighton’s offer, the details of which will be put together in the next few days.
As deputy chairman during the profligate era of Peter Ridsdale, Leighton is seen by many fans as being equally culpable for the club’s financial collapse.
In addition to his role at the Royal Mail, Leighton, 50, is also a director of Sky, building giant Wilson Connolly and high-street retail chain Bhs. He is acutely aware that allowing Leeds to go into administration could ruin his reputation as one of the City’s highest flyers, earned from his days as chief executive of Asda.