The Friedkin Group reaches agreement to buy Everton

[Vintage]

I'm actually never taking anything for granted here anymore, wasn't there some fella who said it wouldn't go through a few weeks ago and got laughed out of it and remember the barcode who said we were getting a 10pt deduction before anyone knew and he got laughed out of it aswel. We are beginning to look like a laughing stock ourselves unfortunately

 

[Goat]

Absolutely taken back about this hearing about it going into the Sligo game today so dunno much of the ins and outs and too tired to look back on what's happened but presume t's either the finances are worse than they thought or don't want to be linked with paying russians or a dodgy American group aka 777? If anyone can fill me in on the jist of it

777 are entering it a lengthy and potentially reputational damaging court case and DFG want no part of that crapshow

 

[Vintage]

777 are entering it a lengthy and potentially reputational damaging court case and DFG want no part of that crapshow

Understandable they dont want to have theirs hands muddied but surely before the period of exclusivity they would have known or seen this coming with 777 unless they unearthed alot more in their background checks

 

[Vintage]

there was a reason why we wouldn't pay, because we are skint, when credible purchasers like Fredkin back away from the table, who do you think is going to bail us out now? same old Everton

Credible purchasers like Friedkin?? The whole time you were literally grilling the Friedkin group for providing no funds for player purchases in almost every post you put on as if they owned Everton. Don't start moving the goal posts now. You remind me of Hank out of Me, Myself and Irene. You are actually bonkers

 

[Zatara]

The lads on ToffeeTV today revealed that Friedkin pulled out of buying Roma and then two months later, purchased them. It was used as a negotiation tactic.

Food for thought.

Public knowledge, theyve not "revealed" anything that isnt already known.

What was Romas financial situation like though? I've got no idea, did they have loans that needed repaying etc?

Pretty similar to ours.

Just did a bit of forensic on the Friedkin takeover of Roma.

They actually did exactly what they did to us today at Roma, pulled out of the e deal, then long months later returned to complete the deal on better terms.

I wouldn’t fall if my chair if they come back in for us and this is them drawing a line in a game of won, loose on price or who takes the 777 haircut.

"Forensic"? Did this 'deep dive' involve reading an article

They may well come back but theyve shown they wont be looking to invest additional capital to pay off the 777 debt quickly.

I hope we move on very quickly to a non-US buyer. These guys are timewasters.

So this 200 mill ACAP/777/ whoever the f debt can’t be paid off until the legal dispute in US is settled and all the time we are paying eye watering interest rates on it ?

Why cant it simply be paid off as per the terms of the agreement?

 

[Zatara]

If it’s debt, we can pay it off against whatever the contract says. If it’s equity we could be on dodgy ground…….

To whom?

If the contract says 777 then to them. If they cease to exist then to an administrator, if the court have made a judgement then the court. 777 problems are not ours unless they hold equity in the club….

Spot on Pete.

 

[Zatara]

…

“With 777 Partners embroiled in a number of legal cases, some with claims of fraudulent activity, and with another Miami-based firm, A-CAP, who had been the primary source of funding for 777’s football activities, having taken prominence due to them wanting to reduce their exposure to 777, The Friedkin Group were ‘uncomfortable’ with the risk attached to the 777 debt to the club.”

So, yeah.

The issue really is, the 777 debt can’t be settled, because it’s in dispute in the Leadenhall case. ACAP and Leadenhall are both claiming they have rights to own the asset (our debt) after 777’s demise - a US court has granted an injunction, that either side can’t negotiate the settlement or dispose of the asset. Thereford Friedkinen or Moshiri can’t negotiate that part of the debt burden - the hope would have been to negotiate a hair cut on the debt.

The fact its unresolved carries too much of an uncertain risk and Friedkin walked.

But what exactly is the risk? Say it’s £200m - they may have wanted to pay less now, but if it can’t be resolved now it just sits as unsecured debt longer (appreciate interest etc may be high) but that would appear to be the limit - we simply pay back what we have borrowed over a longer period of time).

Unless they were heavily relying on paying next to nothing on it….but surely they would have known the status of the litigation when they paid MSP, Bell and Downing back?

Friedkin clearly didn't plan to pay off 777 yet. Moshiri clearly could pay off the loan, but maybe he's trying to play a game of taking advantage of their position to save some money. If he pays off the loan at full value he can't.

If someone wants to pay off all of our debts day 1 then this is a non-issue. That clearly wasn't the Friedkin plan or they are trying to leverage the situation

I think the hope was negotiating a hair cut, the 777 debt apparently has a 10.25% interest rate and matures in 2026. You can work out the interest rate, so that’s clocking in the background, if that can’t be settled by court injunction, then it’s significant finance to take on and a lot of money you need to pay - that’s dictated by a third party in this case a court, while you don’t know who eventually will own the debt and their intentions.

May be other things at play - more then likely Friedkin loan would turn to equity, while the plan would have been to restructure R&M and 7777, with more sustainable debt - that can’t happen with the 777 situation = more money the business haemorrhages, that you can’t control.

Equally I think there was some talk of Moshiri bearing the burden in his asking price and that and all above was to great too overcome - apparently this all happened Weds.

There seems to be 3 schools of thought here:


A: @Hellerad and @damo taking the view that TFG are wary of the US legal system -- despite there being a legal agreement in place on the loan.

B: @pfim thinking that TFG dont value the club that highly and were willing to proceed if ACAP/777 were willing to renegotiate.

C: That 'suburbia' twitter account, @peregrine @Blue peter and myself seeing that TFG made the decision to not inject any additional capital to the £200mil+ (MSP + B&D + Moshiri) to pay off ACAP / 777.


We are just guessing of course. But my thinking is fully behind that if the debt is paid off tomorrow under the terms of the agreement all would be fine & TFG can restructure the clubs debts to be paid back once the stadium is built.

They knew the debts before going into exclusivity. Was this just a time wasting exercise to take a high interest deal with security on the stadium? Perhaps and looks likely i suppose.

But surely the club will have already been aware of the ACAP situation and relayed to TFG the amounts needed to settle the loan?

Does it seem like TFG would pay off MSP + &B&D just to have the opportunity to negotiate with ACAP / 777 ?

That seems amateurish at best. They dont seem to be amateurs to me.

I think were best away from TFG now.

 

[Zatara]

@pfim

If it actually is uncertainty with fraud and fund sources, Everton could file an interpleader action and deposit repayment with the Courts and let them settle it between themselves, but even that might not work if 777 refuses to release Everton from agreements to pay because they didn’t pay direct.

But this assumes Everton has the funds to pay the loan into interpleader, which it does not.

Any prospective buyer viewing that debt on the sheet has to conduct a risk analysis as part of its due diligence and it seems to me TFG said no thank you.

Unless Everton or another lender or third party buyer figures out a way to eliminate that risk, it will be an encumbrance on the sale.

I don’t think it’s as bad as it seems, honestly. Somebody will be willing to take the risk and TFG might be flexing some muscle to renegotiate the purchase price based on perceived risk.

I have a question. If i want to buy the club and enter into an exclusivity period with Moshiri.

I then elect to study the 777 contract and see that to pay it off and remove their unfolding situation, I must pay £200mil + £10mil in early repayment penalty fees.

Based upon the contract emblazoned with 777 and there not being any court case to date, what is stopping me from simply repaying 777 -- NOT circumventing and going to the source/origin of funds.

Secondly, what would prevent me from approaching the courts and transferring the repayment to them pending a decision on ownership of the debt -- with the court settling the repayment confitmation quickly due to us following the legal agreement between the club and 777?

It seems incredibly outlandish to me that a debt repayment can be prevented / stonewalled. Some may even say that would be illegal as it would go against the terms of the agreement.

I think they were the options I mentioned, but without the legalese. I’m glad for your your comments. Of course everything comes down to the assumption that suitable funds are available to eliminate that particular debt, without them it’s all a bit moot …..

Certainly seems like TFG were unwilling to make said funds available

 

[Zatara]

Understandable they dont want to have theirs hands muddied but surely before the period of exclusivity they would have known or seen this coming with 777 unless they unearthed alot more in their background checks

Precisely, it is public knowledge and has been for ages

 

[evernut]

British consortium interested as well according to the sun

Jim Ratcliffe wants Branthwaite so bad he’s buying the club . The 50m that Moshiri wants is a cheaper deal than their next 55m offer for JB. His holiness was even rumoured to be visiting the BMD as part of a delegation last Tuesday and sources say he was impressed with the roof.

 

[Damo_1878]

I'm actually never taking anything for granted here anymore, wasn't there some fella who said it wouldn't go through a few weeks ago and got laughed out of it and remember the barcode who said we were getting a 10pt deduction before anyone knew and he got laughed out of it aswel. We are beginning to look like a laughing stock ourselves unfortunately

This is a really healthy thing to say. To be able to self criticise is good

I'm guilty of it. I thought and stated because Friedkin Group are so well capitalised nothing will impact their due diligence

Well it turns out, just because they're rich doesn't mean they’ll throw money away.

Kieran Maguire stated yesterday part of it all is they offered Moshiri £1 for his shares (whilst Moshiri wants £50 million)

The scale of the debts etc mean the club is essentially worthless. Because it costs so much to deal with all the debt.

People should think on that.

I also don't listen to "CitizenSuburbia" on twitter. He doesn't even know what "fruit of the poisonous tree" means. He engages in constant wishful thinking.

Between Moshiri and Bill Kenwright the club is in a right mess. It costs that much to sort it out the shares in the club are worthless

That is the Bill Kenwright legacy

Bill Kenwright made Everton Football Club worthless

 

[BornBlue76]

There seems to be 3 schools of thought here:


A: @Hellerad and @damo taking the view that TFG are wary of the US legal system -- despite there being a legal agreement in place on the loan.

B: @pfim thinking that TFG dont value the club that highly and were willing to proceed if ACAP/777 were willing to renegotiate.

C: That 'suburbia' twitter account, @peregrine @Blue peter and myself seeing that TFG made the decision to not inject any additional capital to the £200mil+ (MSP + B&D + Moshiri) to pay off ACAP / 777.


We are just guessing of course. But my thinking is fully behind that if the debt is paid off tomorrow under the terms of the agreement all would be fine & TFG can restructure the clubs debts to be paid back once the stadium is built.

They knew the debts before going into exclusivity. Was this just a time wasting exercise to take a high interest deal with security on the stadium? Perhaps and looks likely i suppose.

But surely the club will have already been aware of the ACAP situation and relayed to TFG the amounts needed to settle the loan?

Does it seem like TFG would pay off MSP + &B&D just to have the opportunity to negotiate with ACAP / 777 ?

That seems amateurish at best. They dont seem to be amateurs to me.

I think were best away from TFG now.

Can add me to group C.. but as yet I don’t have enough to draw their reasons.
On the surface TFG have acted recklessly by paying off a debt into an entity they didn’t understand or were given false promises on, only to find out it wasn’t true (the nature of the 777 debt)..
The other option is they know exactly what they doing and hope to gain a financial advantage by this action.
But one thing is sure, TFG could just pay the money into Everton to settle and then covert that into equity on the purchase and lose nothing (depending on our owners play in this and does anyone actually trust Moshiri as an ethical businessman)

 

[BornBlue76]

Kieran Maguire stated yesterday part of it all is they offered Moshiri £1 for his shares (whilst Moshiri wants £50 million)

There could be something to this. In the end say the club is valued at £600m - often these takeovers is the equity valuation less debt. That means if TFG pay 777 debt, they would have what around £350m owed to them.
They would want to net pay Mosh £250m and covert their debt to equity for the balance.
Mosh wants his £600m out is my guess. If that is the case we going nowhere fast.

Then I don’t know the size of Moshiris loans to the club. Maybe after this there is no value left and effectively Moshiri would take a bath on the investment.

For the record I don’t know if it’s £600m, £300m or worth £1B

 

[mmmmsnouts]

I've said all along, Moshiri is quite possibly a dead man if he doesn't recover enough of Uncle Usy's money in a sale. But no one in their right mind will actually pay that much money for the club. Tough spot.

 

[skumar55]

Rumours that VICI finance are ready to save us?