Opinion

Opinion: The last big club – takeover thoughts

Private tour, deserted Elland Road.
Written by Simon O'Rourke

Rumours are rife about a takeover of Leeds United. We take a look at the parties involved, and rate their probability.

Since the financial implosion in the early noughties, a running theme at Leeds United has been whispers of takeover talk. From Sebastien Sainsbury who almost took over the club in late 2004, to the Sheikh dubbed “Sheikh Rubadub” by Ken Bates, to the most recent rumours of Genting Group, Red Bull and others, Leeds United has more turns on the takeover merry-go-round than many fans realise.

The reasoning many point to for the constant interest in Leeds United should not surprise many football fans. Leeds is a one-club City, with a rich footballing history and a fan base that follows the team no matter what the league position. As recently as 2014, Leeds United replica shirt sales exceeded those of fourteen premier league clubs, including two who were active in European competition. From an investment standpoint, Leeds United offers a pathway to deity status for the person(s) brave enough to take the risk.

October 2014, and Cellino’s last stand

In late October of 2014, Massimo Cellino effectively gave up trying to own Leeds United. He was told in no uncertain terms that if a “dishonest” verdict was attached to his conviction, he would face a long-term ban and constant opposition from The Football League. While Cellino continued with the party line of “Leeds United are not for sale”, he took his second meeting with Red Bull with the express purpose of securing their investment. It is not clear whether Cellino had the intention of selling his entire holdings at that time, but the calculated leaks of information regarding the meetings strongly suggest that Cellino was open to a public bidding war.

The club denied these meetings took place (then later back-pedalled on that denial only to reiterate it a week later) but as we reported in early November, the talks did indeed take place and Red Bull were furious that information about the talks had made their way to the press. Massimo Cellino had recently returned to Leeds from Miami and a final round of talks with American financiers about securing funding for the purchase of Elland Road. We reported those talks broke down due to The Football League refusing to vouch for Massimo’s long-term future at Leeds United, and it is believed this was when Cellino made the decision to pull the plug on his investment.

Andrew Umbers, Mr. Eight Percent

While Red Bull were said to be furious with Cellino, Dietrich Mateschitz, CEO of Red Bull, was said to be intrigued by the possibility of owning Leeds United without the stigma of Red Bull attached to a bid. I was told on January 13th that he told Chairman Andrew Umbers in the first week of January that he would match any legitimate offer for Cellino’s holdings up to the figure of £32million. Massimo Cellino had placed a price tag on his Leeds United holdings of a staggering £50million.

In talks with another prospective buyer and long time chief LUFC Flirt, Genting Group, Andrew Umbers allegedly quoted the £50million figure and it was immediately rebuffed. Umbers returned to the talks with Genting Group in early February, stating that Cellino was willing to start talking at £32million though an alleged leaked email suggests this figure was £27million, the reported sum of his current and long term commitments to Leeds United and Gulf Finance House (“GFH”). Cellino’s actual monetary investment into Leeds United currently stands at a reported £16million, suggesting the remaining eleven million is a commitment to GFH. It is understood that Andrew Umbers, who stands to make up to eight percent on any takeover, favours a third option, the same consortium that Cellino was talking to in The United States. Quite why Umbers prefers this option is anyone’s guess, though the suggestion that the bid would be partly funded by Peak 6 Investments may offer a bit more insight.

The front-runners

While many fans refuse to believe that Cellino will be heading for the exits, too much actual evidence points to a sale in the near future. At 2900Miles.com, we have been predicting a sale by June 1st 2015 for almost six months, as this is the date given to us by six independent parties.

At the time of writing, both Dietrich Mateschitz and Genting Group are understood to have started extensive Due Diligence separately, but neither party currently enjoys any exclusivity with their bids potentially subject to change depending on the outcome of Due Diligence. These reports are said to come from inside the club but I have been unable to get a response, as have the actual Leeds United press

Below, I take a brief look at each of the three potential bidders. We will revisit this topic on Monday of next week at which point further information should be publishable.

Rumoured bidder: Genting Group

Genting Group have been a permanent fixture on the rumour mill for the last fourteen months. It is believed they held off on their original takeover bid in January 2014 primarily due to demands by Gulf Finance House that GFH would retain ownership and management of 25% of the club. With Cellino willing to sign the same deal with GFH, Genting are said to have left a standing offer with Cellino and Umbers should the need to sell Leeds United arise in the future.

Genting are rich. Richie Rich rich, and while this is important for any prospective owner it’s actually Genting’s commercial clout that may prove to be the biggest weapon in Leeds United’s arsenal. Genting are a financial behemoth with over sixty casinos and resorts worldwide. Genting CEO, Tan Sri Lim Kok Thay (63) has owned a private residence in London for over forty years and oversaw the introduction of over forty casinos in the United Kingdom. His personal fortune is estimated by Forbes at $5.5Billion. Genting Group’s combined market capitalisation is over US$29 billion as of 28 February 2015.

Lim Kok Thay has three sons and it’s one of those sons, Lim Keong Hui, who is said to be responsible for the original interest. Despite social media tomfoolery suggesting the family had barely even seen The UK, Lim Keong Hui (31) followed in his fathers footsteps by attending University in London. It has often been reported that his following of Leeds United started in the late nineties, a starting point for many new fans as the revolution under O’Leary marched on.

No matter the media outlet profiling the Lim family, there is a constant opinion that the continued success of Genting is due primarily to Lim Kok Thay’s ability to put the right people in the right positions. He demanded that his sons earned their place in the Genting empire and only awarded them a place on the various associated Boards Of Directors once they had proven themselves to be worthy. It is also reported that Lim Kok Thay is eager to establish a foothold in the sports world to further the Genting Group expansion in The United Kingdom and Europe as a whole.

Probability: 6/10

Potential bidder: Dietrich Mateschitz (Red Bull)

As posited above, Red Bull have been lurking around Leeds United for nearly six months. With the talks between the parties said to have gone as far as tentative due diligence in 2014, Red Bull then backed away from the deal as details went public. While the club did a great job initially of putting distance between Leeds United and the Red Bull rumours, those rumours refused to go away especially when Cellino let slip that he had infact spoken to Red Bull about sponsorship, which is something Red Bull have long stated they are not interested in.

As reported back in November of last year, Red Bull advisors were said to want to be willing to revisit the idea of acquiring Leeds United once Massimo Cellino’s appeal was turned down. It is believed that in late December, Red Bull CEO Mateschitz decided that in order to avoid the reaction to “Red Bull buys Leeds” and all that comes with it, this would become a personal venture at least in the short term. He is said to have approached Chairman Andrew Umbers with the afore-mentioned offer of meeting any bid up to £32million. As recently as ten days ago I was told that Mateschitz had at least spoken to the club within “the last few days” to start the formal process of an official offer. This no doubt came as a reaction to the Genting Group’s alleged approach.

Dietrich Mateschitz is worth $10.8Billion according to Forbes, though my personal opinion is that while the initial takeover bid may be in his name, it would soon be switched to the Red Bull banner. What that could mean for Leeds United is anyone’s guess, but the thought of “Red Bull Leeds” rightly strikes fear in the heart of many football fans.

Ignoring the Red Bull issues for a moment, a bid in the name of Mateschitz could be a great thing for the club, but only if Red Bull were kept on the outskirts. I’d welcome “Thorp Arch by Red Bull” and other similar naming schemes, but the club would need to keep its identity as a whole, and I’m not sure Mateschitz would be able to resist the lure of a Premier League team bearing his company’s name and brand. If Red Bull were to be involved in Leeds United on a sponsorship basis only, then Mateschitz would need to own the club. It’s the only way it could possibly work.

Probability: 7/10

Potential bidder: American consortium

When Massimo Cellino spoke with the American financiers in October 2014 about financing the acquisition of Elland Road, he was taking direction from confidant (and now Chairman) Andrew Umbers. Umbers has ties with the reported group, financed in part by Peak 6 Investments, and it is believed he stands to make a nice chunk of change from any dealings with them.

The group were turned away by The Football League when looking for assurances on Massimo’s future, and it has been suggested to me by several unattached parties that this sparked the opening of a discussion that would lead to the eventual takeover by the group, who would then retain Andrew Umbers as Chairman and instill Massimo Cellino as honorary President, something The Football League would permit only if proper assurances were made that Cellino and his family are in no way financing the operations of Leeds United.

While the group appears to be made up of strong businessmen, the Peak 6 involvement is a worry. See: Leaks: Item #30.

This potential bid is the apparent backup option being presented by Andrew Umbers. The worry is that information leaking out about the other bids may be a smokescreen to allow this group, by far the weakest of the three, to complete a takeover.

Probability: 8/10


 

Final thoughts and Poll Results (I know, I ramble..)

I have long held the belief that Leeds United will be sold by June 1st of this year, allowing Cellino an emotional farewell after the Rotherham game. It is my understanding that he is to meet with at least one of the three bidders early next week at his Miami home, before heading to Leeds in mid April.

At least two people who have spoken with Massimo Cellino recently have described his mood as “furious” with Andrew Umbers, and he made a point to demand that Umbers cease commenting so publicly and freely on Leeds United. Each word from the mouth of Umbers seems so calculated, so scripted, and often includes the odd slant against Cellino in his own clever way.

I ran a quick poll on social media to see which of the discussed takeover options would be most welcome. Genting Group led the poll, gathering 80% of the vote. I ran a simultaneous vote to gauge support for Leeds Fans LLP, a group that will hope the eventual new owners are open to fan involvement. The support for Leeds Fans LLP was 98% in favour of the fan led initiative.

I’ll follow up on this article within the next ten days, but no matter what happens with present or future owners, make no mistake that Leeds United is a project that screams “Big time”. Leeds United may have suffered kick after kick in the last decade, but to deny the club is anything but The Last Big Club not to be in The Premier League is to deny football history.

About the author

Simon O'Rourke

A lifelong Leeds United fan, Simon moved to Nova Scotia in 2002. Married for seven years with three children, Simon's first love has always been Leeds United. Simon is the owner of 1919 Media, a website design and development company whose name is a homage to Leeds United.

  • Guest

    How do you know things that journalists close to the club do not?

    • Simon O’Rourke

      For the same reason they have barely mentioned the GFH leaks.

      FYI: I deleted your duplicate comment that you posted under the name “Complete BS”. I stand behind everything I write, and I post it in my name. I suggest you do the same.

  • CompleteBS

    How do you know things that journalists closer to the club do not?

  • aussie.leeds

    Thank you simon for this piece and i look forward to your updates in 10 days time.
    Do you know how much money the American consortium are worth?

  • Tycipa

    Do you think the LLP will get its hands on the GFH share before Max sells his and wouldn’t Max’s buyers want the GFH share too? I’m sure there’s a cunning plan at play amongst all this chicanery so don’t share if that means showing the LLP’s hand.

  • TOMAlufc

    Keep up the good work Simon

  • David Kershaw

    Excellent article. It is staggering that LUFC don’t have big time owners. I would welcome any of the groups you have mentioned.

  • pattayarag

    The only thing that bothers me about Genting is they appear to be Harvey’s choice. He was reported to have traveled to meet with Genting when he was trying to block Cellino’s initial bid and when the sale of Leeds United supposedly had nothing to do with him. All very odd but I’m sure you’ll have a mole with the whole truth and nothing but. Of course the other issue with Genting is they’ll be in a very small minority if they are ‘clean’ casino owners. Rare as hen’s teeth.

  • Steven Manning

    Much food for thought indeed,could we actually be forgiven for feeling hopeful about the long term future of our club?

  • David Mark Aldridge

    Fantastic stuff Simon. Much appreciated. MOT

  • Glyn Jackson

    Please keep writing your articles, and ignore the wums