Leeds United takeover in disarray
Yorkshire Evening Post 29/1/14by Phil Hay
Sport Capital’s takeover of Leeds United looked to be on the verge of collapse today after an outspoken attack by one of the group’s members on club owner Gulf Finance House.
Andrew Flowers – a leading member of the Sport Capital consortium – cast fresh doubt on the group’s ability to secure ownership of Leeds by revealing that they had lowered their bid to GFH and were now at odds with the Bahraini bank.
GFH and Sport Capital agreed the terms of a 75 per cent buy-out back in November but Flowers, the managing director of United shirt sponsor Enterprise Insurance, said a “revised offer” had been submitted after “a number of things” arose during due diligence. The reduced deal has been rejected by GFH, leaving United’s current owner in direct conflict with a group who originally planned to complete their takeover before the start of January.
United managing director David Haigh – one of the driving forces behind the Sport Capital consortium but also a long-standing employee of Gulf Finance House subsidiary GFH Capital – appeared increasingly isolated last night as the scale of a bitter disagreement emerged.
Flowers went further in a statement released to the YEP by criticising GFH for considering an offer of investment from Massimo Cellino, the Italian chairman of Cagliari who has been in England for much of the past week pursuing his interest in purchasing Leeds.
Cellino was scheduled to attend last night’s 1-1 draw with Ipswich Town at Elland Road but is thought to have missed the game and flown home to Italy instead.
The 57-year-old – cryptically described by Flowers as a “prospective preferred bidder” – has prior convictions for fraud and is facing charges of embezzlement in Italy. Flowers accused GFH of breaching the terms of its agreement with Sport Capital by dealing with him and questioned Cellino’s suitability for a shareholding at Elland Road.
Flowers said: “We are convinced this will not be in the interests of the club, the manager, the players or the fans.
“We must ask the question whether the prospective preferred bidder understands anything about the culture of Leeds United, its fans, its heritage or British football.”
On Sport Capital’s proposal, Flowers said: “We were fully justified in revising our bid because a number of things have come to light which were not as originally described.
“However, as lifelong fans we believe our offer and plans were in the best interests of the club and its loyal supporters. This boils down to much more than money but GFH have chosen to ignore that.
“We believe the owners have breached their covenant with us but much more importantly they have breached their covenant with the fans.”
Sport Capital and Cellino are two of three potential buyers for Leeds with another group led by former Manchester United employee Mike Farnan expected to make a second bid for the club shortly.
Farnan’s consortium made an initial, unsuccessful offer in November but were unable to open negotiations with GFH while Sport Capital operated under exclusivity. The group were hoping to establish formal talks this week.
Signs of disagreement between GFH and Sport Capital have been increasingly evident for the past fortnight, opening the door to rival parties interested in buying the club.
The chaos behind the scenes overshadowed last night’s Championship match, with Ross McCormack’s second-half penalty earning Leeds a 1-1 draw.
The result ended a run of five straight defeats but Leeds are now eight points behind the play-off positions.
A dejected McDermott said: “It’s tough at the moment, on and off the pitch. Very, very tough. You have to take that point (against Ipswich) and I can’t be negative about it. There’s enough negativity here.
“The preparation was very difficult and this has been one of the most difficult periods I’ve had as a manager, especially the last few days.
“Forget the league. This isn’t about the league. It’s about the club going forward. Forget me too. This is about Leeds United. The only way you can do well here is to have stability at the top.”
Luke Varney was left out of last night’s match after an approach for him from Blackburn Rovers.
McDermott said: “Luke spoke to me on Tuesday and felt he didn’t want to get injured. It would have jeopardised his opportunity to go to Blackburn. He would have been in the team. What can I do?”