The takeover of Leeds United took another dramatic twist last night as it emerged that Massimo Cellino is ready to link up with a rival group of buyers and complete a deal which could greatly weaken the influence of Gulf Finance House at Elland Road.
Unexpected discussions between Together Leeds – the consortium fronted by Mike Farnan – and Cellino’s Eleonora Sport Limited are close to establishing an agreement for the two sides to take shared control of United, potentially sidelining current owner GFH.
The development came with Cellino, the Italian businessman who first bid for Leeds two months ago, waiting to see if he will win an appeal against a Football League ruling which barred him from buying a majority stake in the club.
His case was heard in London on Monday and the decision now lies with Tim Kerr QC, the barrister responsible for considering his appeal. Cellino is attempting to argue that a conviction for tax evasion imposed on him in Sardinia last month does not breach Football League rules.
The 57-year-old has a deal in place with GFH to buy 75 per cent of shares in United for a fee of around £25m but the contract was subject to Football League approval and now rests on Kerr upholding Cellino’s appeal.
Cellino has preempted the outcome of that legal challenge by engaging in talks with Together Leeds, talks Farnan described as “very productive”.
A rejection of Cellino’s appeal would quickly end the possibility of Together Leeds buying out United in partnership with him but the YEP understands that Cellino’s share purchase agreement with GFH gives him and his company, Eleonora Sport, the right to decide who his 75 per cent stake should be sold to should his own takeover fail.
Together Leeds will look to use that clause as a way into Elland Road if Kerr rules that Cellino’s tax conviction contravenes the Football League’s Owners and Directors Test.
The consortium, which includes former Manchester United International managing director Farnan, Welcome to Yorkshire chief executive Gary Verity, former Hull City chairman Adam Pearson and other unnamed backers, have endured a fractious relationship with GFH and United’s board since failing with an offer for the club.
Together Leeds tried without success to make fresh contact with GFH chief executive Hisham Alrayes last month, with Cellino’s buy-out threatening to collapse, but they approached Cellino direct after meeting to discuss their next move on Monday.
Farnan told the YEP: “It’s the right thing to do. We believe that and Massimo believes that. This is about doing what’s best for Leeds United and by working with Massimo or Eleonora, however it works out, I think we can make sure there’s a future for the club and a very good future. He’s really impressed me with his passion and the talks have been extremely positive.”
Cellino has already begun making staggered payments to GFH and the Bahraini bank believes that under the terms of their deal he is legally committed to funding the club until the end of July. GFH stands to retain some of the remaining 25 per cent of shares in Leeds and also agreed that existing chairman Salah Nooruddin would remain in his position. United managing director David Haigh is due to become Cellino’s club chief executive.
Leeds are losing around £1m a month and are believed to have built up debt of around £20m.
Cellino was willing to take on those liabilities and is due to complete final payment to GFH before the end of the year. But his plans for Leeds hang on the outcome of his appeal and Farnan, who claims Together Leeds have private funding behind them, said: “Obviously we’ll have to see how that goes but we’re committed to working with Eleonora whatever happens.”