The Saudi Arabian-led takeover of Newcastle United has collapsed with the consortium formally withdrawing the offer after growing frustrated that there was no timeframe as to whether it would ever be passed by the Premier League.
Telegraph Sport can reveal that as part of the £305 million bid – the figure is just over the £300 million previously stated – to buy Newcastle the Saudi Public Investment Fund had also included a written commitment to invest £250 million in the club over a five-year period plus significant additional sums into the local community.
Telegraph Sport also revealed earlier this week that talks had reached an impasse after months of attempting to satisfy the Premier League’s Owners and Directors Test.
The deadlock centred on demands made by the Premier League to clarify the link between the Saudi’s Public Investment Fund and the Saudi state. It is understood that it was this issue, far more than an ongoing row involving piracy of broadcast rights for sporting events which involved the Qatari-owned Bein Sports, that has led to the bid finally being withdrawn.
The PIF was adamant that it is an independent investment vehicle but it appears this did not satisfy the Premier League. After weeks of going back and forth with questions and answers it appears the PIF felt it was going way beyond what was normally asked as part of the Owners and Directors Test. Additionally there was frustration that after initial indications there were no ‘red flags’ with the deal the process was entering its 17tt week – normally it lasts less than a month – with no deadline set and no indication as to when the Premier League would make a decision.
Less than 48 hours ago there was still hope that the group would manage to find a way through to complete the deal to buy out Sports Direct owner Mike Ashley for just over £300 million.
A price of £305 million is understood to have been agreed – down from an original bid of £340 million which was discussed prior to the coronavirus pandemic – with Ashley fully committed to the deal even though the exclusivity agreement he signed had expired at the end of last month meaning he could speak to other bidders.
Ashley will retain a deposit of around £15 million which was paid when the deal was agreed and papers submitted to the Premier League back in April in what became the longest-running takeover saga in English football history.
Newcastle fans will be devastated by the collapse of the takeover with the bid also involving the property magnates, the Reuben Brothers, and PCP Capital Partners which is run by financier Amanda Staveley and which organised the deal. The PIF was to take an 80 per cent in Newcastle with 10 per cent going to the Reubens and PCP having the final 10 per cent.
“With a deep appreciation for the Newcastle community and the significance of its football club, we have come to the decision to withdraw our interest in acquiring Newcastle United Football Club. We do so with regret, as we were excited and fully committed to invest in the great city of Newcastle and believe we could have returned the Club to the position of its history, tradition and fans’ merit.
“Unfortunately, the prolonged process under the current circumstances coupled with global uncertainty has rendered the potential investment no longer commercially viable. To that end, we feel a responsibility to the fans to explain the lack of alternatives from an investment perspective.
“As an autonomous and purely commercial investor, our focus was on building long-term value for the Club, its fans and the community as we remained committed to collaboration, practicality and proactivity through a difficult period of global uncertainty and significant challenges for the fans and the Club.
“Ultimately, during the unforeseeably prolonged process, the commercial agreement between the Investment Group and the Club’s owners expired and our investment thesis could not be sustained, particularly with no clarity as to the circumstances under which the next season will start and the new norms that will arise for matches, training and other activities.
“As often occurs with proposed investments in uncertain periods, time itself became an enemy of the transaction, particularly during this difficult phase marked by the many real challenges facing us all from Covid-19.
“We feel great compassion for the Newcastle United fans with whom we shared a great commitment to help Newcastle United harness its tremendous potential and build upon its impressive and historic legacy while working closely with the local community.
“We would like to say that we truly appreciated your incredible expressions of support and your patience throughout this process. We are sorry it is not to be. We wish the team and everyone associated with it much good luck and success.”
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Newcastle United F.C., Saudi Arabia, Premier League, Mike Ashley, Amanda Staveley
World news – GB – Newcastle takeover bid collapses after Saudis pull out