[Archived] Rovers Takeover

[Spansterkid]

I love how £5m is quoted without a hint of comedy.

The media over there is clearly clueless about the Premier League

Which, unfortunately, also tells us a lot about the VH Group's knowledge of the Premier League. Clueless media, clueless VH Group... it's not looking good!

[philipl]

Which, unfortunately, also tells us a lot about the VH Group's knowledge of the Premier League. Clueless media, clueless VH Group... it's not looking good!

But Kentaro are not clueless and they are going to be completely in charge of this show.

VH will have to get smart and get hands on very quickly to avoid the Kentaro agenda (which is 100% profit and politically advancing their business plan) from totally taking over.

[booth]

Which, unfortunately, also tells us a lot about the VH Group's knowledge of the Premier League. Clueless media, clueless VH Group... it's not looking good!

They'll get torn apart by the English press if they start talking about transfer kitties of £5mil. Heck, the Trust were going to put up £5mil in January if we weren't sold on by then, and that's regarded as "struggling" by our media.

On the plus side, I suppose we'll be able to finally pay off Salgado's mansion with that cash.

[Spansterkid]

But Kentaro are not clueless and they are going to be completely in charge of this show.

True, let's hope it is a show and not a sham. Kentaro might be connected in ways we haven't discussed, or even thought of, yet. Although their involvement instinctively makes me more worried perhaps their involvement clinched the deal for the VH Group and they have a cunning, and yet to be fully revealed, master plan.

Well... here's hoping (more than expecting)!

[67splitscreen]

But Kentaro are not clueless and they are going to be completely in charge of this show.

VH will have to get smart and get hands on very quickly to avoid the Kentaro agenda (which is 100% profit and politically advancing their business plan) from totally taking over.

Preferable puppets on a string rather than on Kentaro's hands then.

[Wing Wizard Windy Miller]

But Kentaro are not clueless and they are going to be completely in charge of this show.

VH will have to get smart and get hands on very quickly to avoid the Kentaro agenda (which is 100% profit and politically advancing their business plan) from totally taking over.

This is what i don't get... Surely Kentaro could afford to buy rovers themselves? Why align with another company?

[booth]

This is what i don't get... Surely Kentaro could afford to buy rovers themselves? Why align with another company?

Didn't I read VH aligned with Kentaro at the recommendation of Rovers? Or did I dream that?

[47er]

The talk on here is getting stupid now, what has it got to do with us how much they are worth they must have satisfied the Trust and the Premier League to how much money they have got. Provided we dont do a Portsmouth or a Leeds is all i care about and that we get more funds for players than what we get now from the Trust

Said it all in a nutshell.Why do people make a comparison between what we are being offered and a perfect world. Surely the correct comparison is between what we are experiencing now and what the future could be?

"so many questions" says Simon Garners 194 . The point is that there are no questions to be asked of the current arrangements--we all know the answers as to where we're heading.

[philipl]

This is what i don't get... Surely Kentaro could afford to buy rovers themselves? Why align with another company?

Even the PL would wake up if a players' agent with potentially competing TV rights turned up to do the directors and owners test on their own.

[chilly]

Quotes...

Justifying the investment, Desai said, "It does make perfect business sense to us. In Europe, football is an extremely popular sport and we felt we could promote our brand through this club."

http://timesofindia.indiatimes.com/sports/football/english-premier-league/top-stories/top-stories/Venkys-set-to-buy-EPL-club-Blackburn/articleshow/6818082.cms

“Now that we are going global, we need a global sport, hence a football club,” Mrs Desai explained."

Brushing off the financial difficulties, Mrs Desai said, “The club has no major losses... That is not a major financial issue nor does it have accumulated debt. We will pump in whatever is needed but the main thing is to get the club back into good shape. This is an investment and it will grow on its own strength.”

Mrs Desai said that while they will pump in an additional £5 million to ensure they get good players, she ruled out any high-profile acquisitions at least for now. “We won’t need to buy expensive players, we can always lease them,” she said, adding, “We don’t expect to be in the Top 5 of the Premier League. We will be happy to be in the Top 10-12.”

She added that Indian and multinational companies have begun to ask for sponsorship of jerseys and at stadia, to which the VH Group is “complexly open as we need to turn around the club”. “But our first priority is to get the club on a strong footing and back into the Premier League for which we might need to put in more money. As of now, we have no plans to put the Venky’s logo anywhere as this will be an independent business,” Mrs Desai said.

http://economictimes.indiatimes.com/news/news-by-industry/et-cetera/Indian-poultry-major-Venkys-to-buy-Blackburn-Rovers/articleshow/6817984.cms

I cant believe none of you have picked up on what shes just said. Her reasons for buying the club is so that venkys can be more globally known. We are basically an advertising bill board for them. From other articles they are have re-iterated this by saying that hopefully through rovers they will be better known around the world and so will be able to push their products in those countries.

If you read carefully in a nutshell this is whats happened..

They have noticed a club for sale that is very nearly self sufficient, debts of only 20mill..with room for improvement..eg, better sponsors.

They realise that this will still not make the company self sufficient. So they look at whats eating away at the income...answer is wages.

They strike a deal with kentaro to provide good loan players at cheap wages.

They decide if rovers can get top 10 finishes with such a load of tosh for players the talented loanees will surely be able to manage atleast 10th spot.

The lower wages and better sponsors will mean rovers break even each year. And hey presto venkys have free global advertisement.

Well its not free they paid 46mill i hear you say..Well the amount of publicity and brand awareness they are getting will probably generate 46million worth of new business within two years for them.

So all in all as long as we remain in the premiership and break even they dont care much more than that.

And if it doesn't work as they planned they will put us up for sale and leave us to rot like the trust have done.

[Miker]

I haven't really participated in all the takeover talks since its inception, but from what I've read it seems like the VH Group want to stay tight-lipped on their finances and transfer budget, probably an incredibly smart thing to do, given the prices being thrown around nowadays, especially for clubs with any sort of money. It seems pretty obvious, to me anyway, that they have the money to invest into the club and new players (more so than the Trust at least), but don't want to publicise how much.

Can someone explain to me what the source of the problem is with this takeover that's fuelling all this debate? I haven't been following it enough to really understand. It seems to me like we're getting owners that have the finances and will be smart with their investment. I have a concern about investors who go around touting that they will spend 100mil on players, like Syed did, while wondering where exactly this money will be coming from and how we will get a return on such a massive investment in players. On the other hand, the VH Group's statements suggest they will provide steady investment to keep us in the Premier League and be able to challenge for the top 10 every season effectively.

[47er]

TheBig_Sam's take on the news:

"The last time I had some Indian chicken I had runs that would put Sachin Tendulkar to shame. Not convinced by these fellas at all."

What an awful post. True colours there mate.

[Hughesy]

A marketting tool for a chicken company, or a club they honestly believe they can grow into a sustainable business with the help of more exposure in India??

Hope the trust have it right on this one....we have to believe they will do best by Jack.

[Spansterkid]

This is what i don't get... Surely Kentaro could afford to buy rovers themselves? Why align with another company?

According to this they'd be valued at around £300m, far more financial clout than the VH Group but still not much by Premier League standards. Bloomberg Business Week

[booth]

I haven't really participated in all the takeover talks since its inception, but from what I've read it seems like the VH Group want to stay tight-lipped on their finances and transfer budget, probably an incredibly smart thing to do, given the prices being thrown around nowadays, especially for clubs with any sort of money. It seems pretty obvious, to me anyway, that they have the money to invest into the club and new players (more so than the Trust at least), but don't want to publicise how much.

Can someone explain to me what the source of the problem is with this takeover that's fuelling all this debate? I haven't been following it enough to really understand. It seems to me like we're getting owners that have the finances and will be smart with their investment. I have a concern about investors who go around touting that they will spend 100mil on players, like Syed did, while wondering where exactly this money will be coming from and how we will get a return on such a massive investment in players. On the other hand, the VH Group's statements suggest they will provide steady investment to keep us in the Premier League and be able to challenge for the top 10 every season effectively.

I think the sentence at the bottom of this article has made a few people shudder...

http://economictimes.indiatimes.com/news/news-by-industry/et-cetera/Indian-poultry-major-Venkys-to-buy-Blackburn-Rovers/articleshow/6817984.cms

The acquisition has been funded by ICICI Bank .

That's the main worry, as far as I can see. Of course it could be wrong but we won't know until it's addressed by VH.

The second worry is that (on this website, not the article) it's been suggested that going off their accounts, they aren't as rich as it seems.

There's also the sentence (going back to the linked article) that says they are only putting in £5mil in January, and the other sentence that says they'd be happy with 10/12th place. I think some people were expecting more from a takeover.

Overall, going off their statements and interviews over the past 24 hours they don't seem to have a clue about what they're getting into. Which is fine for them if they just want publicity, but could be a little concerning for Blackburn Rovers.

That's what's caused a bit of a stir. I'd say in that order too.

[Spansterkid]

So all in all as long as we remain in the premiership and break even they dont care much more than that.

And if it doesn't work as they planned they will put us up for sale and leave us to rot like the trust have done.

They've still got to pay the £46m back, if they borrow it, which sort of makes their business plan much less viable.

[Tom]

What an awful post. True colours there mate.

Mark is only quoting a quote from twitter by a wannabe comedian, not saying what he thinks. TheBigSam is a twitter legend.

Unless I have missed the joke

[iamarover]

This is the Times of India report.

Now I know that even the most respected newspaper in the country can get things wrong but there it is in all its FT-style reportage. Very easy to find that report- it is on the Economic Times home page and the bit about the borrowing from Icici Bank is towards the bottom of a highly authoritative report.

If it is not true the money is borrowed, this is a PR disaster which needs to be rectified by a denial immediately published in the same newspaper (they will be waking up in India very shortly).

Please, let's get the "fact" the money has been borrowed completely dismissed and not start going into whether this is a West Ham, a Liverpool, a Man U, a Leeds or a Pompey scenario.

Of course they have borrowed the money. No question. Look at this story about their accounts:

http://www.valuenotes.com/ApekshaShah/Apeksha_Venkys_27Aug10.asp?ArtCd=154668&Cat=C&Id=36

and

http://profit.ndtv.com/news/show/exclusive-venky-s-not-looking-at-stake-sale-cfo-says-97721

They are a publicly quoted company. Their debt/equity ratio is around 30% which is fine for a company that size. Indeed it seems they have been paying off debt and the markets seem happy with their liquidity. But they have definitely borrowed. All of it, and then formed a strategic alliance as part of their business plan. Overall it looks a healthy, if slightly uncomfortable business for anyone with links to animal welfare, (this is Intensive farming of animals with a capital 'I'). There are, however, 2 slightly concerning business issues which we should be concerned about, leaving aside any ethical concerns that may arise from any future Jamie Oliver chicken investigations:

1. The PBT ratio to revenues is poor. Broadly you should look at how much money is coming in (revenue) and how much you have left after costs (Profit). Their margin is currently around 12% and has been knocking around 7% in the past. Most businesses that size would be looking to be well above 22 or 23%.

2. As one of the articles note, such wafer thin margins are hugely susceptible to sudden price rises or flu outbreaks etc which would quickly put pressure on the company.

That said they have cash liquidity and they have diversified their business into other areas, for precisely those reasons, and globalisation is another way of expanding whilst spreading the risk. Rovers and football helps the global spread of chicken farming. This business strategy is the reason I would guess that Venky's won the day. They are publicly quoted and hence more trustworthy in what they say. It would be much easier to tie a corporation like this down on covenants over Brockhall etc., than it would a foreign individual not living in the UK ... try suing him if he breaks any of them. And the Trust just wouldn't fancy future litigation after disposal.

Had Syed or Shah put the money in immediately, of course, as per Abramaovich or Fayed that might be a different story. But they didn't. Fifteen year plans don't wash for Trusts wanting protection. As a private company with no duty of disclosure it probably felt too risky. Check out how easy it is to get Venky's information on the web - shareholders, revenue, debt - yes debt, compared with getting similar information on Syed or Shah. No comparison. And that is worrying. Venky have probably signed up to the Trust's conditions. I always assumed them to be too onerous and soI couldn't see a buyer ever getting his money back out.

But to be fair, it looks like they do have a plan. It isn't earth shattering. But it is credible. And it is a plan.

So what is it? At a guess: Rovers will be the Ajax of the UK regularly developing and selling players from across the world. Including, quickly, India. Sam will probably move to be a global Director of Football, which, with his knowledge of sports science etc would probably suit him, and we will be getting a series of young coaches, again being prepared ahead of lucrative moves in the mid term.

That, coupled with Indian marketing, is a realistic plan to pay back the banks without touching the assets that make the club what it is. As a public company, quoted on an international exchange with solid rule of law to back it, the Trust had to go with this option. The other two private bids would have been loaded with risk. And you can't gamble with a club's heritage, or a man's legacy.

It isn't a dream, it isn't a Lottery win, it isn't a return of the Walker messiah. But it could be a whole lot worse.

Last month in Mumbai I saw festivals to Ganesha, the elephant faced Hindu God of Luck.

We will all need him now.

[Mr. E]

Even taking everything else aside (which no real fan should, and there are a million more important things that we'll leave out for now), how can anyone with some business understanding think this makes sense is beyond me. Premiership clubs are not this gigantic marketing tool some people, like our potential new owners, think that they are. Maybe United, Liverpool, Arsenal...but the likes of Rovers, Bolton, Stoke...? Not in a million years. How soon will it be before they come to realize this fact, and figure out that injecting cash into a club that does not give you nearly enough benefits as you had hoped is a futile endeavor? The Indians have not found America here, the reason why we have not been taken over until this point, and the reason why no Rovers fan could ever have expected such a business takeover before this summer is because this is a reality that can not be changed by any marketing strategy.

Unless you believe this group is so special and so unique that they can turn water into wine...one has to be a fool to think positive of this potential deal even in the plainest business sense.

You can not make money from Blackburn Rovers. Fact. Anything else is, at best, grand misconception.

[Miker]

Even taking everything else aside (which no real fan should, and there are a million more important things that we'll leave out for now), how can anyone with some business understanding think this makes sense is beyond me. Premiership clubs are not this gigantic marketing tool some people, like our potential new owners, think that they are. Maybe United, Liverpool, Arsenal...but the likes of Rovers, Bolton, Stoke...? Not in a million years. How soon will it be before they come to realize this fact, and figure out that injecting cash into a club that does not give you nearly enough benefits as you had hoped is a futile endeavor? The Indians have not found America here, the reason why we have not been taken over until this point, and the reason why no Rovers fan could ever have expected such a business takeover before this summer is because this is a reality that can not be changed by any marketing strategy.

Unless you believe this group is so special and so unique that they can turn water into wine...one has to be a fool to think positive of this potential deal even in the plainest business sense.

You can not make money from Blackburn Rovers. Fact. Anything else is, at best, grand misconception.

Isn't this exactly what the VH Group are saying? They have clearly said that they will be happy with a top 10-12 finish, suggesting that they're not going to inject crazy money into the club, but simply provide it with the sort of funds that will let us compete in the market with the teams in and around us. This means, as iamarover has said, that we will look to do things like sign on youth and sell for a higher price. I'm sure they could sell their chicken at the stadium as well!

It seems like they want to put in some form of investment into the club, although not a spectacular amount, but it is still more than the Trust will provide. It seems like a fair business plan to me, but obviously it means we're not gonna be splashing out 10million per player.

[AlanK]

Would you expect an english football team to know how to manage an indian chicken farm? no? then don't expect it to work the other way around. this is a bloody disaster.

[ROVERS]

the first player we need to buy, if he is still plying his trade anywhere should the deal go through......... DICKOV!!!!! so he could round around like a headless chicken

[neekoy]

Great result for the club, exactly what we should be aiming for, top 10 stability and a good cup run every now and again.

I, for one, welcome our chicken overlords

[SouthAussieRover]

I actually registered about 6 weeks before that under a different username but my registration was never confirmed and, after a while, I lost the ability to post.

I don't think you would have ever had the ability to post if your registration wasn't confirmed.

[philipl]

This morning's LT thanks to Kamy's texts (my observations in brackets):

£46m buyout completed by next Thursday (just confirmed that is a week on Thursday)

No Man City style spending

Mgt team to stay (presumably that means directors and the football management)

Bid to attract new Asian fans

Purchase done on an equity base rather than a loan or "loan based leveraged loan". (Hopefully that means there is no involvement of ICICI Bank and the Financial Times of India got that bit wrong but this refers the interface with Rovers and the Trust from what I can tell.)

Premier League have started checking the proposed new owners but fit and proper tests will only be started once the deal is officially finalised between proposed buyer and the club. (This means there must be details of the deal not yet finalised so there are numbers still to be supplied)

The family are sports mad and have financed three India international friendlies in the last 2 months.

Sponsored the T20 side Trinidad and Tobago and an ATP Tenis Tour event in Mumbai in 2008.

Micky Aigner from Times of India says Venkys are a huge company- money is not an issue in taking control of Rovers. They will use the Rovers acquisition to penetrate the UK pharmaceutical sector.

Kentaro helped broker the deal.

Kentaro will play a part.

Sam will be made aware of Kentaro players but will have the day to day say on whether he wants them at Ewood.

Ali Syed has not given up his bid and will honour his charitable donations and commitments regardless of the takeover outcome.