Ken Bates insisted today that he had avoided the “parasites, con-men and get-rich-quick merchants” bidding to buy English football clubs after passing ownership of Leeds United to GFH Capital.
The 80-year-old defended the protracted process leading up to GFH Capital’s buy-out of Leeds as the dust settled on the Dubai-based company’s £52million acquisition.
Bates and GFH Capital ended seven months of negotiations on Tuesday night by signing a deal which will see the private equity firm take full control of United before Christmas.
GFH Capital deputy chief executive David Haigh has been appointed to the board at Elland Road with immediate effect, and two other members of senior management at GFH Capital, Hisham Alrayes and Salem Patel, will become directors of the Championship club next month.
“With these people I like the fact that they’ve not rushed in,” Bates said. “You look at so many takeovers that have gone wrong. Some have rushed in like a bull in a china shop and immediately found problems for themselves.
“Clubs attract all the parasites, con-men, agents, hangers-on and get-rich-quick merchants who want to cash in and take advantage of people’s ignorance. We’re not doing it like that which augers well for the future.”
GFH Capital’s takeover will be officially ratified once it receives the approval of the Football League, with Bates setting December 21 as the expected date of final completion – two days after United’s Capital One Cup tie against his former club Chelsea.
In an unexpected development, Bates has secured a deal under which GFH Capital will retain him as chairman for the rest of this season and install him as president when the season ends.
GFH Capital previously insisted that Bates would have “no long-term future” at Elland Road once its buy-out was finalised.
Bates described the period between Tuesday night’s agreement and final completion next month as “transitional”, saying: “They (GFH Capital) will be on a learning curve.
“Apart from anything else they know nothing about the day-to-day running of Leeds United.
“I’m very happy to work in tandem with them to make sure the learning curve is as smooth and easy as possible.
“What I will say is that although the negotiations have taken such a long time, one of the benefits of that is that unlike some oversees owners who’ve come in blind, this six-month courtship has given them enough opportunities to see how Leeds United works – the advantages and disadvantages, the strengths and weaknesses and what needs to be done and supported.”
Back in June, a month after talks first began, GFH Capital paid £2million to Leeds in return for exclusivity to arrange and finalise a takeover. The company injected further funds into the club yesterday morning following completion of the first phase of its buy-out.
The money – described by Bates as “working capital” – was expected to be handed to manager Neil Warnock with the Football League’s emergency loan window due to shut at 5pm this evening and Warnock desperate to add to his depleted and out-of-form squad.
GFH Capital has indicated its faith in Warnock and is also expected to keep on chief executive Shaun Harvey, a director at Leeds who figured prominently in negotiations between the two sides.
But the YEP can confirm that the agreement to purchase Leeds does not include agreements to buy back United’s Elland Road stadium or their training ground at Thorp Arch. GFH Capital says it is committed to regaining ownership of both properties but is yet to finalise a sale with their existing owners.
Elland Road is presently owned by Teak Commercial Limited, on off-shore firm based in the British Virgin Islands, while Thorp Arch was bought in 2004 by the Manchester property developer Jacob Adler. The lease of the stadium and the training complex costs Leeds around £2million annually.
Haigh is planning to attend Elland Road for the first time in his capacity as a club director during Saturday’s game against Crystal Palace. Patel will also be present at the game.
Haigh, a lifelong Leeds supporter, said: “After a long process of negotiations spanning Leeds, London, Monaco, Dubai and Bahrain, it gives us great pride to have completed the deal for Leeds United.
“A brief but important transitional period now begins in terms of the changeover of ownership: we have injected further funds into the club and now we look to the future and start the exciting journey to take Leeds United back into a prime position in English football once again.”
GFH Capital – a company which is wholly owned by the Bahraini investment bank Gulf Finance House – first initiated talks with Bates and Leeds in May.
Despite its deal hovering on the verge of collapse more than once, it took a crucial step forward last week when United submitted the proposal to the Football League.
The governing body is still to give its approval and has offered no fixed timescale for a decision but a source at GFH Capital told the YEP it had no expectation of any complications with the Football League.
The full details of GFH Capital’s buy-out are still to be revealed and the company has not commented on whether it has acquired Leeds United alone or Leeds City Holdings Ltd, United’s parent company. Leeds City Holdings Ltd – the original target of GFH Capital’s takeover – owns a number of subsidiaries including Yorkshire Radio and Leeds United Media Limited.
But the decision to allow Bates to maintain a firm and long-term link to Leeds is likely to be viewed as the most controversial aspect of GFH Capital’s buy-out.
Bates became chairman in 2005 after fronting a takeover for the anonymous Forward Sports Fund (FSF), and he took over as owner and majority shareholder in April 2011 when he acquired a 72.85 per cent stake from FSF.
Bates said: “Nothing will change. I will continue as chairman until the end of the season when I look forward to handing over to my successor and becoming president, sitting back, taking a bit more time off and enjoying eight years of very hard work.
“Neil Warnock will continue as manager and will have more support than the present administration have been able to give him. We look forward to a smooth transition.”
Alrayes said: “We would like to thank Ken Bates for his substantial contributions to the club.
“He has decades of experience in running football clubs and we will work with him to ensure a smooth transition in ownership – in the interests of the club’s immediate and longer-term future.”