Guardian 28/7/07
Bates won back Leeds without making biggest bid
Matt Scott
Saturday July 28, 2007
The Guardian
Ken Bates won control of Leeds United despite KPMG being presented with bigger cash offers, documents released by the administrator showed yesterday. The bid on behalf of Bates's Leeds United 2007, the company demanding the transfer of the Football League share which would endorse its takeover, was for an unconditional £1.8m. A tender from Redbus Group and Simon Morris offered almost double that sum - £3.501m.
What apparently swung the process in Bates's favour was that Astor Investment Holdings, an offshore company, stated its willingness to waive the £17.6m it was owed. Had any of the three rival bids won, Astor would have stood firm on the £17.6m. This meant the £3.5m offered by Redbus-Morris would have been spread much thinner, across £30.25m as against the £12.6m being demanded of Bates. "The key factor is the Astor waiver of the debt for one of the bidders, which at the least is unusual," said Dean Dorrell, the chief executive of Redbus. "Coming across insolvencies as often as we do, it's unusual for an unconnected party to make that offer to a bidder. The whole process was extremely unsatisfactory."
KPMG stated in an open letter responding to questions posed of it that it had been appointed as administrator by the solicitor for Astor, Mark Taylor, who is also a director of Leeds United 2007.
Redbus believes, though, that despite the waiver offered by Astor, theirs was ultimately the biggest offer KPMG received for Leeds. In its documents the administrator did not account for an additional £8m that would have been paid by Redbus-Morris in the event of the transfer of the "golden share" from the Football League which would allow the newly owned Leeds United to kick off the new season. KPMG justified this by saying that "the additional £8m was to be used to settle 'football creditors'." It added: "It is a condition of the league that such football creditors are paid in full in the event of agreement to transfer the football share. Therefore, all the offers must satisfy this requirement and make such funds available. Accordingly, even if the above offer had been capable of acceptance, it would not have changed the administrators' decision to sell to [Bates]." However, Dorrell claimed last night that there had been no such provisos set on the £8m payment. "The only condition we put down on our £11.501m bid was that £8m of it would be paid upon transfer of the Football League and [Football] Association shares," he said. "There was no condition whatever of where that £8m would be paid: to the Football League, football creditors or other such." The administration has cost £885,000 in professional and legal fees, although KPMG refused to disclose how much of this it received.
Leedsunited.com 27/7/07
LEAGUE STATEMENT
A statement from the Football League...
LEAGUE BOARD RE-CONVENES TO DISCUSS LEEDS SITUATION
The Board of The Football League met today to consider the current situation regarding Leeds United.
At the meeting, the Board were informed by their legal representatives that the club's administrator, KPMG, had delivered on Wednesday the final documentation requested by The League. The Board therefore convened at the earliest opportunity.
The Board considered all the information submitted and authorised the Chairman to invite senior representatives of Leeds United 2007 Ltd. and KPMG to a meeting early next week with a view to seeking to make progress.
Bates won back Leeds without making biggest bid
Matt Scott
Saturday July 28, 2007
The Guardian
Ken Bates won control of Leeds United despite KPMG being presented with bigger cash offers, documents released by the administrator showed yesterday. The bid on behalf of Bates's Leeds United 2007, the company demanding the transfer of the Football League share which would endorse its takeover, was for an unconditional £1.8m. A tender from Redbus Group and Simon Morris offered almost double that sum - £3.501m.
What apparently swung the process in Bates's favour was that Astor Investment Holdings, an offshore company, stated its willingness to waive the £17.6m it was owed. Had any of the three rival bids won, Astor would have stood firm on the £17.6m. This meant the £3.5m offered by Redbus-Morris would have been spread much thinner, across £30.25m as against the £12.6m being demanded of Bates. "The key factor is the Astor waiver of the debt for one of the bidders, which at the least is unusual," said Dean Dorrell, the chief executive of Redbus. "Coming across insolvencies as often as we do, it's unusual for an unconnected party to make that offer to a bidder. The whole process was extremely unsatisfactory."
KPMG stated in an open letter responding to questions posed of it that it had been appointed as administrator by the solicitor for Astor, Mark Taylor, who is also a director of Leeds United 2007.
Redbus believes, though, that despite the waiver offered by Astor, theirs was ultimately the biggest offer KPMG received for Leeds. In its documents the administrator did not account for an additional £8m that would have been paid by Redbus-Morris in the event of the transfer of the "golden share" from the Football League which would allow the newly owned Leeds United to kick off the new season. KPMG justified this by saying that "the additional £8m was to be used to settle 'football creditors'." It added: "It is a condition of the league that such football creditors are paid in full in the event of agreement to transfer the football share. Therefore, all the offers must satisfy this requirement and make such funds available. Accordingly, even if the above offer had been capable of acceptance, it would not have changed the administrators' decision to sell to [Bates]." However, Dorrell claimed last night that there had been no such provisos set on the £8m payment. "The only condition we put down on our £11.501m bid was that £8m of it would be paid upon transfer of the Football League and [Football] Association shares," he said. "There was no condition whatever of where that £8m would be paid: to the Football League, football creditors or other such." The administration has cost £885,000 in professional and legal fees, although KPMG refused to disclose how much of this it received.
Leedsunited.com 27/7/07
LEAGUE STATEMENT
A statement from the Football League...
LEAGUE BOARD RE-CONVENES TO DISCUSS LEEDS SITUATION
The Board of The Football League met today to consider the current situation regarding Leeds United.
At the meeting, the Board were informed by their legal representatives that the club's administrator, KPMG, had delivered on Wednesday the final documentation requested by The League. The Board therefore convened at the earliest opportunity.
The Board considered all the information submitted and authorised the Chairman to invite senior representatives of Leeds United 2007 Ltd. and KPMG to a meeting early next week with a view to seeking to make progress.