[Archived] Rovers Might Have Been Sold?

[BuckyRover]

Wow.

I did not expect this development today.

Promising news

[den]

wot..............no Barry?

Is he awe rite?

Yeah, he's alright Mike. Lost interest during the last season.

[Roversider]

What nasties due you think could 'possible' come up. To those of us who do not know, explain due dilegence.

Due diligence is the abbreviated version of the full which is a 'Due Diligence Audit'.

Basically it gives permission to the prospective buyer to inspect the accounts in detail, beyond that which is published. Normally that sort of information would only be available to the owners of the business.

So, what sort of nasties? Well these are often how accounting provisions and asset valuations are made. For example if an owned piece of land was seen as overvalued when you look at how it has been shown in the books.

As pointed out that usually results in a renegotiated price not a failed sale.

Think of it as having a surveyor looking over the house you want to buy and discovering some roof repairs are needed.

[BuckyRover]

If he is serious, I wouldn't expect there to be any "nasties". I get the impression that the trust are very professional and would be doing things by the book.

Might not be true, but that is the impression I get

[Guest Kamy100]

BRFCS Exclusive: Spokeswoman Confirms Exclusivity

[den]

BRFCS Exclusive: Spokeswoman Confirms Exclusivity

Faster than 4 weeks, wow.

[Mc Love]

Wow they probably have a huge team working on the accounts and books of the club to try and get it done fast so that we can sign some players before 31st

[Hughesy]

BRFCS Exclusive: Spokeswoman Confirms Exclusivity

Top work Kamy.

They hope to do it faster than 4 weeks too....Like it!

You just get a feeling with this lot that they mean business and that they are ruthless and will get it done pronto!!

Wonder if they will be present at the game tomorrow?! Surely they will have at least a rep there?

[brfcshabba]

Nice work Kamy

[philipl]

What nasties due you think could 'possible' come up. To those of us who do not know, explain due dilegence.

Rovers are a £55m turnover business operating in the most public arena imaginable in a sport which has not always been totally clean.

If you were buying a club like this you will want to know:

- that all the player and staff contracts are enforceable and that there are no nasty clauses you have not been told about

- that the club really does own all the assets it says it does

- that what it owes is correctly stated and that there are no hidden potential liabilities you have not been told about

- that the income and expenditure numbers are accurate and that the forecast cash flow and profit and loss figures are sensibly calculated

- that the club has relations with the people it says it has (accountants, lawyers, banks, agents etc) and that there are no hidden hands in the business

- critically given the nature of the vendor, I would want to know with legal opinion that the Trust actually has the right to sell the club; that might not be so clearcut

The way this is done is that the buyer with their lawyers assembles a due diligence book which for a club Rovers' size will run to 100+ pages of A4 in landscape format. Syed's WGA will no doubt have already presented their standard due diligence book to the Trust to be getting on with it but they will now be customising it to cover all the particulars of the Rovers' business and throughout the 4 week period additional follow-up questions will be added to the due diligence book which will be maintained under strict version control by the lawyers.

The Rovers' directors will be allocating the tasks of answering the questions between themselves.

This is where it gets sensitive because the individual Directors will answer their allotted questions with the evidence appended and TAKE PERSONAL LIABILITY for the accuracy of their answer to both the Trust and WGA. As a result, each and every answer will be carefully checked by the Rovers' and Trust's lawyers and referred to the professional accountants to be cross-checked as necessary.

This whole process is likely to be costing £500K in fees, possibly more because if you get it wrong, it is very easy for the loser from the mistake to sue for their loss on the basis of "you signed this but as a Director you should have known that what turned out to be the facts were different". So you simply do not put anything into the due diligence book which has a risk of being factually incorrect.

When the answers come back, the nasties can be:

- what you sign off on is different from what you said in the heat of negotiation; these are the worst and cause questions of bad faith

- in order to protect their backsides, the Directors hedge too many answers for the buyer to feel comfortable; in which case they can rightly demand that definitive or fuller explanations be provided

- the most frequent problem is that in running a business as big as the Rovers, things are turned up in the due diligence that the Directors themselves were unaware of; clauses in agreements which were missed, documentation they always intended to complete but never got round to it and so on. The good news for Rovers is that they have been up for sale for so long that the Directors really should have been doing everything mindful of this process happening so those holes should be few in number. If there a lot of them, the new owner might change his mind about who he employs...

Hope this helps. In a well run company like Rovers, it should just be a massive paper chase but tough buyers have been known to use due diligence as an excuse to renegotiate no matter how clean the books are. If that happens, the Trust might decide to walk away.

It is odds on (I won't give an exact probability) that there will be an announcement of an unconditional sale about five weeks from now.

[Mc Love]

Top work Kamy.

They hope to do it faster than 4 weeks too....Like it!

You just get a feeling with this lot that they mean business and that they are ruthless and will get it done pronto!!

Wonder if they will be present at the game tomorrow?! Surely they will have at least a rep there?

I would rather there reps to be working on the books to get things done faster than watching us!

[Iceman]

bloody exciting times right now. Who copied and pasted the entire BRFCS users to this thread? Looks like everybody ran out of the transfer thread

This is a positive step, and perhaps somebody or Philip can explain how serious things get when due diligence are intered into. Is it a done deal, barring any unforseen circumstances that might be picked up on?

[tony gale's mic]

This is huge, really huge.

If he really does invest £300m into our club it could transform us into a side like Everton at the very least.

My only worry is if it means it's given in the form of loans which we'll have to pay back over time, like with other clubs.

If that's the case then the more he invests the more dangerous it could be.

Still, for now I'm excited anyway.

[Guest Kamy100]

This is huge news guys, basically it now upto Mr Ali whether to go ahead with this deal or not. From the outside it seems that Rovers are a very well run club so the due diligence should be straighforward (although I don't know much about this process).

I can say that Mr Ali's people are all very excited about this, whether it is good for the club or not that will become clear over the next few weeks. They do have exciting plans which hopefully can be revealed very soon. I am trying to stay neuteral on this because after all these people are his PR team so they will only say positive things but they do come across as ultra professional.

[Balwer]

This is huge, really huge.

If he really does invest £300m into our club it could transform us into a side like Everton at the very least.

My only worry is if it means it's given in the form of loans which we'll have to pay back over time, like with other clubs.

If that's the case then the more he invests the more dangerous it could be.

Still, for now I'm excited anyway.

Do not the new rules prohibit this sort of arrangement (hence the conversion of debt to equity by Abromavich and Ashley, among others)?

[Iceman]

This is huge news guys, basically it now upto Mr Ali whether to go ahead with this deal or not. From the outside it seems that Rovers are a very well run club so the due diligence should be straighforward (although I don't know much about this process).

I can say that Mr Ali's people are all very excited about this, whether it is good for the club or not that will become clear over the next few weeks. They do have exciting plans which hopefully can be revealed very soon. I am trying to stay neuteral on this because after all these people are his PR team so they will only say positive things but they do come across as ultra professional.

Syed Ali's proposed takeover of Blackburn Rovers moved a step closer today. Mr Ali's spokeswoman has confirmed to BRFCS.com that they "have 4 week exclusive period of due diligence, this gives us the necessary time frame to conduct our due diligence, however we hope to proceed faster than that".

Kamy, from the above without revealing too much, do you know a time frame that they might want to complete the deal? I know, due diligence over the 4 weeks, but are they looking to seal a deal, in time for us to make some signings? if that is the case, then im not sure, if Sam wants to make a signing, until just before the close of the transfer window.

Cheers

[philipl]

Do not the new rules prohibit this sort of arrangement (hence the conversion of debt to equity by Abromavich and Ashley, among others)?

The new UEFA rules about how cash is paid in and what the limits are start in 2012/3. The limits do not limit things Syed has said he will invest in- the Academy and marketing operations.

If the £300m is for real and is spread over a number of years, Rovers will end up spending something each year which would be the norm for the likes of Villa, Spurs or Everton- it is not like we are going to blast City out of the transfer market. The amounts going in should be comfortably within the room for creativity in interpretation and of course having the French marketing guru on board is a master stroke as UEFA and the Prem are going to think more than twice about challenging what he is doing.

The good news fr Rovers of course is the new rules force the cash to be paid in as shares rather than debt beyond a fairly low number.

[Hughesy]

Do not the new rules prohibit this sort of arrangement (hence the conversion of debt to equity by Abromavich and Ashley, among others)?

Dont they come in later - 2012 or something?

Excited.com

[Iceman]

The new UEFA rules about how cash is paid in and what the limits are start in 2012/3. The limits do not limit things Syed has said he will invest in- the Academy and marketing operations.

If the £300m is for real and is spread over a number of years, Rovers will end up spending something each year which would be the norm for the likes of Villa, Spurs or Everton- it is not like we are going to blast City out of the transfer market. The amounts going in should be comfortably within the room for creativity in interpretation and of course having the French marketing guru on board is a master stroke as UEFA and the Prem are going to think more than twice about challenging what he is doing.

The good news fr Rovers of course is the new rules force the cash to be paid in as shares rather than debt beyond a fairly low number.

im guessing Phil, that would over a sustained period ensure some sort of stability?

[Guest Kamy100]

Syed Ali's proposed takeover of Blackburn Rovers moved a step closer today. Mr Ali's spokeswoman has confirmed to BRFCS.com that they "have 4 week exclusive period of due diligence, this gives us the necessary time frame to conduct our due diligence, however we hope to proceed faster than that".

Kamy, from the above without revealing too much, do you know a time frame that they might want to complete the deal? I know, due diligence over the 4 weeks, but are they looking to seal a deal, in time for us to make some signings? if that is the case, then im not sure, if Sam wants to make a signing, until just before the close of the transfer window.

Cheers

I would love to say more can't do so because it would betray confidences.

[SIMON GARNERS 194]

Great news...could be some exciting times to come once again at Ewood.

Even prudent,sensible spending of say 15-20 Million per season and his investment could last for decades.Yes,this potentially really does put our club on another Premiership level.

Lets hope this comes to fruition and lets move our club forward an ALL fronts

[Iceman]

I would love to say more can't do so because it would betray confidences.

completely understand, not a problem mate. Thanks for the update

[Billinge End Blue]

<that the income and expenditure numbers are accurate and that the forecast cash flow and profit and loss figures are sensibly calculated> Philipl

Is it just coincidence that this announcement has fallen at the exact outset of the season? Could the next four weeks of BRFC's revenue be a significant factor and taken into account by the buyers? If so. I hope the gate v Everton tomorrow is big enough to be impressive or small enough to show an opportunity for improvement!

If the end of the Jack Walker era at Rovers is imminent, reckon we should all offer a massive vote of thanks to our current owners and management ( but let's not preempt things, eh?).

[Iceman]

Exciting stuff! My only concern is if he gets cold feet during the due diligence period and backs out.

Philip, what sort of things would likely be the cause of him backing out at this stage? Just curious...

check one or 2 pages back El Tombro, Philip explained it there

[Bobby G]

Its just a little shame that the squad cant be strengthened ever so slightly during August.