Full steam ahead for the takeover
By Phil Hay
The Football League’s decision to sanction the appointment of three members of management at GFH Capital to the board of directors at Leeds United removed a major obstacle to completion of the firm’s takeover on December 21.
Approval from the Football League is fundamental to any serious investment and the realisation of GFH Capital’s 100 per cent buy-out a week on Friday was reliant on the governing body accepting that the three men fronting the deal were fit and proper.
With the ‘Owners and Directors Test’ behind them, there is no obvious obstruction to final payment in return for full ownership in nine days’ time.
David Haigh, deputy chief exeutive of GFH Capital and the only one of the company’s staff who has already joined United’s board, will travel to England from Dubai tomorrow to begin the countdown to a full transfer of shares.
Haigh spent time in Bahrain last week – the home of GFH Capital’s parent company, Gulf Finance House – and preparation for the takeover continued in the build-up to Saturday’s announcement that Haigh, Salem Patel and Hisham Alrayes had all received permission from the Football League to become directors at Elland Road.
Haigh’s appointment took place on November 20, the day when GFH Capital and Leeds chairman Ken Bates finally shook hands on a deal, and Patel and Alrayes will be added to the board as soon as the Dubai-based firm replaces Bates as owner of the club.
They are also expected to become directors of subsidiaries of Leeds City Holdings Limited, United’s parent company.
Confirmation of Haigh’s addition to the board is still to be announced by Companies House, which requires new appointments to be declared within 14 days, but a Mortgage of Shares submitted on November 20 confirmed that LUFC Holding Limited – the off-shore firm being used by GFH Capital to buy Leeds – has been incorporated in the Cayman Islands. Having previously invested at least £2million in United, GFH Capital injected fresh funds within hours of its agreement with Bates.
The owners-in-waiting supplied the money as “working capital” but the most pressing outlay facing them now, aside from payment of funds to seal the takeover, is the cash required by manager Neil Warnock in the January transfer window.
Warnock met Haigh and Patel after the pair attended Leeds’ 2-1 win over Crystal Palace on November 24, speaking for around an hour after full-time, but they are still to discuss in detail his budget for next month.
United have asked Warnock to draw up a list of targets, and the arrival of Haigh in Leeds this week should prompt further talks with United’s manager.
Asked whether he was clear on his spending power, Warnock said: “Not at the moment. I’d imagine that will come but I think everyone’s been so busy. I’m just doing what the chairman (Bates) tells me – giving him names.”
A new striker is Warnock’s priority, though his outlook could change depending on decisions made about the players in his squad who hold short-term contracts – El-Hadji Diouf, Michael Tonge, Ryan Hall, Alan Tate and Jerome Thomas.
The 63-year-old Warnock has already been linked with a fresh approach for Leicester City’s Jermaine Beckford and reports yesterday linked him with Max Gradel, United’s player-of-the-year in 2010-11.
Gradel’s wage at St Etienne is likely to be prohibitive, however, and a deal with Beckford – currently approaching the end of an emergency loan at Huddersfield Town but sidelined by a hamstring injury – would require a compromise over his weekly salary of more than £30,000.
The wider details of GFH Capital’s takeover plan involved the repurchase of United’s Elland Road stadium but sources close to the firm say it will concentrate on improving Warnock’s squad before tackling other business.
Despite expectation that GFH Capital would buy back Elland Road as part of its takeover – an acquisition which would cost some £15million – it has not yet finalised the paperwork needed to reclaim ownership of the ground.
At present, the private equity firm holds 33.33 per cent of the shares in Leeds City Holdings Limited, enough to activate the Football League’s ‘Owners and Directors Test,’ which was passed by Haigh, Patel and Alrayes.
The governing body is in the process of completing formalities but neither GFH Capital nor the club anticipate any opposition to their deal.
A statement published by Leeds over the weekend read: “The club are pleased to announce that GFH Capital executives Hisham Alrayes and Salem Patel, who will become directors of Leeds United upon completion of the takeover, have received approval from the Football League to join the club’s board having satisfied the requirements of the Owners and Directors Test.
“David Haigh, who joined the board last month, was also approved by the Football League before taking up his role as a director.”
Haigh, Patel and Alrayes have attended numerous games this season – United’s 1-0 defeat of Leicester City the most recent – and Saturday’s match against Ipswich Town is set to be the last league fixture before GFH Capital pushes through its long-awaited takeover.
Bates plans to relinquish all of his majority shareholding after Leeds play Chelsea in the Capital One Cup a week today. Haigh has worked increasingly closely with the 81-year-old in the past few weeks, shadowing United’s chairman on match-days at Elland Road, and the period between initial agreement on November 20 and the planned handover on December 21 was described by Bates as a “transitional period”.
That period is now poised to end around 24 hours before Leeds play Middlesbrough.
The immediate changes at United are unlikely to be sweeping, however, with Bates intending to remain as chairman until the end of the season and chief executive Shaun Harvey set to remain in his post indefinitely.
Harvey has been chief executive since 2004 when he was recruited from Bradford City by the board headed by Gerald Krasner.
GFH Capital has also promised Warnock its backing having watched him toil through much of the summer transfer window, and the Leeds boss made his requirements clear ahead of last weekend’s defeat to Derby County.
“If we get the four loanees tied up and Diouf as well then I don’t think we need many more,” said Warnock. “I think we’d only be looking at a striker on top of that.”