GFH Capital’s protracted takeover of Leeds United appeared to be a step closer today after the Dubai-based firm provided confirmation that it has the money needed to close out a £52million deal.
A joint statement issued by GFH Capital and Leeds said the company had produced “the necessary proof that it has the funds available” to bring an end to its pain-staking attempt to buy the Championship club.
Negotiations between GFH Capital officials and United’s owner and chairman, Ken Bates, are heading into a sixth month amid growing confusion about the delay in agreeing a sale.
The financial strength of GFH Capital has come under intense scrutiny amid concerns about the stability of its parent company, the Bahraini investment bank Gulf Finance House, but deputy chief executive David Haigh said the firm was “poised to make this deal happen” after offering fresh evidence of its ability to fund a takeover at Elland Road.
GFH Capital has already injected at least £2million into United – an investment made in return for a mortgage of shares in the Yorkshire club – and the company is aiming to acquire a 100 per cent stake in Leeds City Holdings Limited, United’s parent company.
A statement published on behalf of both parties read: “As an obligatory part of this stage of the talks, GFH Capital, which has already provided £2m to the club with further funds available, has now provided the Leeds United FC owners and management with the necessary proof that it has the funds available to close this transaction.”
The statement came after a month of uncertainty in which Bates claimed GFH Capital’s lawyers were responsible for delaying completion of the proposed buy-out.
Speaking on October 6, United’s chairman described the offer to him from GFH Capital as a “pretty straightforward deal
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by anybody’s standards” and said: “I don’t know what the delay is. All I can say to the fans is don’t blame me.”
But following further discussions this week, the 80-year-old, who owns a 72.85 per cent shareholding in Leeds, said: “It’s been a long road but we are in a good place.
“Both sides have been in talks over the last few days to finalise this deal. We are keeping focused and hope to complete very soon.”
Haigh, who has attended several of United’s games since the start of this season and will be present at Elland Road today, said: “With the money in place we are poised to make this deal happen pending agreements and arrangements which are in the interests of the future of Leeds United – we need to make sure all the finer detail is addressed before trading signatures.
“Both sides continue to talk regularly and continue to work hard to get the job done.”
GFH Capital began due diligence on United’s accounts in June after agreeing a period of exclusivity in which to set up a takeover.
United stated at the time that they were confident about GFH Capital securing the necessary funds and passing the Football League’s Owners and Directors Test, a test applied to anyone who acquires 30 per cent or more of the shares in an English club.
Amid close attention on the accounts of Gulf Finance House, GFH Capital has repeatedly refused to reveal how it will source the money needed to secure ownership of Leeds.
More recently, questions were raised about whether GFH Capital’s involvement at Elland Road would conflict with the principles of Sharia law in Islamic states like Dubai and Bahrain.
Salem Patel, a director at GFH Capital, said: “We understand there is some concern related to how Leeds United would be run under our stewardship.
“It remains important to be clear that Shari’ah law will not hinder this transaction nor will it affect the future operations of the club.
“Our intention is to provide investment which will facilitate a successful and sustainable future for Leeds United on and off the pitch.”
Bates became chairman of Leeds since January 2005 and bought a controlling interest in the club from their former owners, the Forward Sports Fund, in April of last year.
He is expected to cut all ties with United if GFH Capital succeeds with its takeover bid.