Ken Bates’ opinion of the confidentiality clause binding Leeds United and the club’s would-be owners, GFH Capital, is that it lay “in tatters” many weeks ago.
A letter issued to the Bahraini Stock Exchange on September 27, confirming the open secret of GFH Capital’s takeover attempt, was a watershed moment, the first in a line of public statements from the Dubai-based firm, its parent company and Bates himself. On that day the black-out gave way to a drip of information from all sides.
In most of GFH Capital’s on-record comment, certain aspects of confidentiality have been regularly applied – in relation to the detail of its bid, the terms involved and the precise timing of the mooted takeover.
The closest GFH Capital came to officially detailing its plans for a full buy-out of United was in saying that it had been instructed to “lead and arrange the acquisition of Leeds City Holdings, the parent company of LUFC.”
A well-placed source at GFH Capital was more candid when spoken to by the YEP at the beginning of last month. He said the company intended to purchase “100 per cent of the club” and establish “entirely new ownership” at Elland Road; ownership without existing chairman and majority shareholder Bates. He also insisted that GFH Capital had the money to do so. In all, it was an unambiguous statement of intent.
It was also at odds in every sense with the report on Thursday night which claimed that the deal on the table had changed so dramatically that it now represented a partnership with Bates or, at the very least, a phased takeover over a period of several months.
In essence, the rumoured proposal would see GFH Capital take its seat at Elland Road as an investor rather than an outright buyer, allowing Bates to remain at Leeds in some capacity until at least the end of this season. It was further suggested that GFH Capital’s input would be led by company director Hisham Alrayes rather than deputy chief executive David Haigh, a Leeds supporter. Both men have attended games at Elland Road this season.
The fundamental assertion – that after six months of bartering this might no longer be a full and immediate takeover – was serious, and not simply because of the aesthetic and political ramifications of Bates retaining firm links with a club where sections of supporters want outright change.
The report brought into question the strength of GFH Capital’s original offer and the credibility of its strategy at a time when the company was indicating heavily that the end of a protracted process is nigh. Certain sources are talking about completion and announcements as early as next week.
Among the possible interpretations of a partnership with Bates or a staggered takeover were two of particular relevance: that GFH Capital felt the need to be guided through the earliest stages of its tenure; or, more worryingly, the company lacked the cash to fund a 100 per cent acquisition up front. Neither possibility credited it with great conviction.
But a senior contact at GFH Capital told the YEP that the report about a deal which prolonged Bates’ involvement at Elland Road was “all speculation.”
In spite of claims to the contrary, the company maintained last night that it was bidding for an outright stake in United and insisted again that it would pay in excess of £50million for the club in cash. GFH Capital has routinely rejected the idea that it might perform a leveraged buy-out which hoists debt on Leeds.
As for Bates, the company is privately adamant that he has no long-term future at Elland Road and will not retain any part of his 72.85 per cent shareholding.
Quite how quickly the 80-year-old would depart after the deal is done might still be a matter for final agreement but GFH Capital sees the future without him, provided it can pull its bid over the line.
In the eyes of the public, the credibility of this takeover will rest on the ability of GFH Capital to be its own boss and rule with purpose and authority; to provide funds as promised for manager Neil Warnock and enhance Leeds as it believes it can. A convincing vision is needed to take the club forward and stabilise home attendances which have fallen on average by 5,000 in 18 months. The company will have much to deliver on and much to prove.
It would already appear to be losing the faith and support of the Leeds United Supporters Trust (LUST), a prominent group with more than 8,000 members.
In a statement published yesterday, LUST’s board voiced concern about the report that GFH Capital was seriously considering a phased-takeover and called for Bates to open himself to other offers.
It is public knowledge that GFH Capital is one of several parties who have shown an interest in his majority stake since the end of last season. Last week’s Inside Elland Road column revealed that a potential bidder from Saudi Arabia was considering showing his hand, regardless of the progress made by GFH Capital.
Yesterday’s statement from the Trust said it had “spoken to the representatives of at least one consortium who we are confident would have the financial resources and ambition we need in new owners.”
It added: “We would ask Mr Bates to consider whether it is time to fully explore other opportunities for investment.
“If after six months of negotiations the best deal that GFH (Capital) can afford is a ‘phased takeover’, we believe our members would be right to ask whether that is an effective solution to the club’s problems, especially when other fully funded parties remain interested in the future of the club.”
The question will be hypothetical if GFH Capital brings forth the readies and buys Bates out. The company says it will do just that. But it can expect to be met at arms length by supporters who need some convincing that the effort has been worth it; that the confusion bred by so long a process has been worth suffering.
At times in the past six months, GFH Capital has felt hard done to and seen itself as the victim of bad or unfair press. More accurately, it has been the victim of a vacuum of hard facts.
The clash of conflicting news this week and the wait to discover what stands up and what falls down is a perfect example of why the fine detail matters – and why it should have been outlined long before now.