Bates denies link to proposed £25m takeover at Leeds - Times 16/1/05

Times Online - Sport Bates denies link to proposed £25m takeover at Leeds By Ashling O’Connor THE takeover saga involving Leeds United has taken many unusual turns, but none so peculiar as yesterday’s disputed claim by Sebastian Sainsbury that Ken Bates, the former Chelsea chairman, had agreed to put in £10 million to save the Coca-Cola Championship club. Sainsbury, great-grandson of the supermarket chain founder, said that he had held a meeting with Bates last week at a London hotel, where Bates, 73, apparently offered to invest the money in return for a 51 per cent stake in the club and the position of chairman. “Nothing was agreed because it was a meeting among a series with people who are interested in coming on board with me once a takeover is completed,” Sainsbury said. Bates, though, denied any knowledge of the meeting. “I’ve been linked with so many clubs that this will take the total to 38,” he said. “I know nothing about it. The only thing keeping me busy is unpacking my shopping from the supermarket.” Bates made at least £17 million through the sale of Chelsea to Roman Abramovich in July 2003 and is known to be keen for a last throw of the dice in football, not least to safeguard his position of influence within the FA. He recently offered to invest in Sheffield Wednesday, whose debts are estimated at £27 million, but was rebuffed. Bates could provide the financial backing for Sainsbury to complete a deal that would prevent Leeds from going into administration, but it seems unlikely. A banker turned restaurateur, Sainsbury has been insisting for several months that he has £25 million in place to take over and restore the financially crippled club to its former glory. However, the Leeds board, led by Gerald Krasner, the chairman, has grown increasingly weary of his claims. In early December it voted to break off negotiations with Sainsbury until he had transferred the money to his solicitor as evidence of funding. Apparent backing by an Anglo-American consortium, Nova Financial Partners, never materialised to its satisfaction and Leeds accused Sainsbury of “playing for time” and attempting to disrupt negotiations with other possible investors. The Leeds board is talking to a consortium of local businessman, led by Norman Stubbs, about a possible takeover. There is a growing sense of urgency to complete a deal, with repayment deadlines looming. The board has reduced the overall debt from £103 million to £25 million since taking over last March, but has constant cashflow problems. A £1.2 million payment to the Inland Revenue, deferred from before Christmas, is owed, while a payment to bondholders is due next month. Furthermore, the pension funds that bankrolled the failed dream of Peter Ridsdale, the former chairman, to qualify regularly for the Champions League are due staged performance-related repayments over the next 17 years. The short-term future of Leeds was secured through the sale of Elland Road, which raised £8 million to repay a loan to Jack Petchey, a property developer, but the £1.25 million in annual rent is still an onerous burden. It is these liabilities that are putting off potential investors. “It is a firecracker and the blue touch- paper has been lit,” John Boocock, the chairman of the Leeds United Supporters Trust, said. The board is keen to avoid administration, not only because it would incur a ten-point penalty from the Football League but because it stands to lose financially. Director loans exceeding £4.7 million, secured against their homes and businesses, would be placed at the back of the creditor queue behind player wages by any administrator.