[Archived] Rovers Takeover

[chaddyrovers]

Thanks Philipl for the update. Think it's very good news is that they haven't use a loan to buy rovers! Also pleased that the current management team will stay in place. Think All rovers fans will be happy that John Williams will stay on has Chairman and Big Sam will stay on has Manager. Hope they will give Big Sam should money to spend to sign a Striker and maybe a midfield playmaker of goalscorer midfield player.

Come On Your Blues!!!

[philipl]

The Sun apparently has a very detailed piece on the take over (far more detailed than anything that has gone into the Mirror).

Looks like the deal is:

£25m to the Trust

£16.1m to the bank

£4.9m for January transfers.

£46m is the amount being put in in total including transfers.

Thanks Philipl for the update. Think it's very good news is that they haven't use a loan to buy rovers!

Re-read my post; I haven't said that.

We need clarification/correction of what appeared in the Financial Times of India (especially in the light of iamarover's analysis) before we start getting gungho.

The money going into Rovers is undoubtedly in the form of equity but the question is where has that money come from? (We have been here before with Syed... only that was billions not millions)

If they are paying the thick end of £5m a year in interest charges (ICICI base rate is 7.75%) because they have borrowed money to pay as shareholding cash they will need to recover those charges and the principle somehow and there will be little more for funds for Rovers in future.

[thenonda]

Cannot wait for Jan transfer window £4.9million will buy us..... ###### all!!!!!!!

The new Rovers are the old Rovers

The takeover has been the emperors' new clothes.

[47er]

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

I don't bother with Twitter so I've never heard of the wannabe comedian. If Mark is quoting it but not endorsing it then I apologise.

However I still find it in poor taste.

[47er]

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.

Already before the deal has even been finalise you KNOW its a bloody disaster. I'm not singling you out because i think loads of posters on this thread have gone absolutely bonkers.

Do people not "trust the Trust" anymore? Did they only trust them when a sale didn't look likely?

Why are people saying they prefer Syed when they don't know what the Trust have learned which has led them to accept VH? I would prefer Syed too if everything he said panned out but obviously it hasn't so why not endorse the Trust's decision?

All these worries about "leasing' and exactly how much VH is worth, whether the deal is leveraged or not-----all will have been investigated by the Trust and their advisors.

Finally if we can be guaranteed 10th or 12th every season I'd take it like a shot.

[TimmyJimmy]

I mentioned yesterday in an earlier post that this was probably about brand recognition and that it was Anuradha Desai's brother who was keen on the left field investments like wine importation etc..

From her recent press release we get :

"Mr Balaji Rao ... has taken the lead in the acquisition. All the non-synergistic diversifications of the VH Group, including film-making under the banner of Bala Entertainment, are his ventures, Mrs Desai said, adding that the Premier League football club is being acquired by a VH subsidiary called Venkys UK Pvt Ltd."

" It will help build our brand, too”.

She is also credited with keeping the family together after her father died with the brothers wanting to branch out on their own, but she persuaded them to stick together but at the cost of allowing them independence to indulge their own interests from time to time.

I also mentioned out that Venky's was only the portion of the VH group that was publically listed the rest of the group is run as a private concern hence their figures are not in the public domain. So all the analysis about how much they have or haven't is by the by, it's all behind the scenes out of the public eye. The statement is that the BRFC purchase will again be through a private company so we will not be learning to much about the financial performance of the club over the coming years either.

Given the involvement of the oft quoted bank finance plus her statement that “This is an investment and it will grow on its own strength” I postulate the following :

- Mrs Desai has given in to her brothers wanderlust

- She has rationalised that it shouldn't do any harm to the real business of the group because

- The funding will be kept separate from the rest of the group's balance sheet

- That with the building of the brand in the sub continent the extra cash inflow from TV rights etc will enable the club to 'wash it's own face'

- That they will stay reasonably at arm's length and rely on Kentara to wheel and deal the day to day grunt stuff of player acquisition, loans etc..

Seems a little half hearted to me for a corporate involvement.

They also seem to be working very hard to lock the deal into place before anything has actually been signed to cut down on the wriggle room for a counter bid from Syed et al.

What a private owner wants to do with their assets is up to them so if the Trust want to do this then, what will be will be. However, as stated previously I am growing more concerned over the complete absence of any interaction with the supporters. Perhaps no one wants to hear but nevertheless we do have concerns and it would be nice if this wasn't all being treated as the sale of some local engineering firm.

The club has many constituent parts but surely the least significant part is not the fan base.

[Bobby G]

January isnt the best time to buy players but with our squad we couldve used a bit more money.

It could be that the club dont want to shout that we can now spend lots of money and play it cautiously as we have always done even in the days of buying Cole, Ferguson, etc...Or it could be that we may be getting Kentaro players for much less than other teams would be, along the lines of Tevez and Mascherano to West Ham, etc...

[PAFELL]

Let's just wait and see what the truth is. Just STOP going over the top again. I'm sure that the LET will have an interview with VH Group this week outlining their plans for the club and the future. Also hope that they have meetings with the fans aswell to explain who they are, what their plans are and understand what the club means to the fans.

Rovers board and trustees are not going to sell the club to somebody who will put the club into more debt and bank loans.

On the latest tv news interview, she said a extra 5 million pounds to spend then straight afterwards the football expert Paul O'Donnell said they were going to be a 60 million pounds transfer fund. So conflicting reports there in the same tv news report!

Correct an extra £5 mill - maybe on top of what has already put aside for transfers.

[Roversider]

For those posters who think the world has ended because we won't have a huge amount to spend in January I would suggest calm down. The reality is Sam doesn't believe that it is the right time to spend effectively on players and I agree with him.

If you're of the camp that the world has suddenly become Blue and White dominated because of the takeover I would equally advise calmness.

The reality is that the new owners will have been vetted by the Premier League (not that I put too much reliance on that) but more importantly by the Trust. Now I am not of the camp which believes the Trust have had some evil plan about the Rovers, they have been good owners for many years and I include John Williams in that. So I do have some faith that the Trust will have made certain that this is a good sale in their view, they have clearly walked away from several other bids which didn't fill them with the same confidence as this one.

So what if the plan is not to do any more than keep Rovers as an established Premiership club? That will do for me, we are not a big club. If that plan includes tapping into Indian sponsorship and a presence there that is a really credible choice. Other clubs have looked towards Asia (look at Man U) but having an Indian connection must help. I remain to be convinced that we can increase the number of Asian fans in Ewood but I am really hopeful that we do. Rovers should be the first choice of any Blackburn lad or lass. It cheers me every new face I see in the ground.

The issue of leasing players or debt remains a question but that depends who is liable for the lease or debt. If it is laid on Rovers rather than the owners then we do have the worrying scenarios of Leeds, Portsmouth and Liverpool. I am hoping the Trust have dealt with that as well as they can.

The VH Group will gain significant image benefits in India and Britain from their ownership of Rovers. The involvement of Kentaro gives clout in obtaining sponsorship, access to new young players and football experience. All that for a relatively small investment up front and a steady injection of funds, again of a relatively small amount compared to the PR. They should also note the negative PR that Gillette and Hicks have had which would be very bad for the VH Group if they let Rovers down.

So a practical and believable business plan with some benefits, at least I can see what is in it for them and it isn't necessary for Rovers to generate profits directly for them before they get something back.

Oh, and hopefully they are interested in Rovers doing well!

[imy9]

I have simply ignored a number of pages due the mass hysteria being created by a number of posters.

Philip- I stand to be corrected but you have been consistent in saying that we should trust "The Trust" as has BPF, so I fail to see why we should defer from this now.

As Timmy has pointed out, how many companies that VH own are actually listed? The Pharmacy sector is huge and it makes financial sense for them to break into that sector in the UK.

I simply want a debt free club, purchasing players that will excite us, playing a brand of football that is fun to watch too- too much to ask for?

[Roost]

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.

iamarover - thank god you posted this - its saved me trawling through pages of crap.

This is the takeover in a nutshell.

Thanks again.

[brian_gallagher85]

The Sun apparently has a very detailed piece on the take over (far more detailed than anything that has gone into the Mirror).

Looks like the deal is:

£25m to the Trust

£16.1m to the bank

£4.9m for January transfers.

£46m is the amount being put in in total including transfers.

Seems to be guess work on the figure from various amounts that have been posted on here by Nicko and others on the past involving the debt etc. Also, their writer is worse than Alan when it comes to the chicken jokes...

[BuckyRover]

Indeed. I can't believe Philip referenced a Sun article for "facts" about our takeover.

[John]

A figure of £6million has been set aside for Allardyce to strengthen his squad in the transfer window, but suggestions that Kentaro, which became a corporate partner with Jerome Anderson’s Sports Entertainment & Media Group (SEM) in February 2009, will supply players as part of its SEM link have been described as ‘misplaced’ by sources involved in the talks.

http://www.telegraph.co.uk/sport/football/teams/blackburn-rovers/8088386/Sam-Allardyce-to-get-6million-to-spend-from-Indian-takeover-of-Blackburn-Rovers.html

[iamarover]

I don't bother with Twitter so I've never heard of the wannabe comedian. If Mark is quoting it but not endorsing it then I apologise.

However I still find it in poor taste.

Which is. The whole point of the comedic genius that is TheBig_Sam.

[Wing Wizard Windy Miller]

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.)

Can anyone shed any more light on this bit? Does it mean that they haven't purchased all the equity from the trust eg the trust retain some of the club until they see how the new owners pan out?

[Sysagent]

Casting aside all the financial worries about the VH Group purchase with it's many questions and very little answers (at the moment), I sit here feeling more uncomfortable about the VH Groups main revenue stream... This being the poultry farming industry and it's well known, publicised, barbaric treatment of animals...

It doesn't sit well at all with my conscience knowing that the possible future owners of the football team I love and support through thick and thin will be owned by these type of people, not at all.

Edit:

Can anyone shed any more light on this bit? Does it mean that they haven't purchased all the equity from the trust eg the trust retain some of the club until they see how the new owners pan out?

I think what it means is that they have borrowed money (either from a bank or some other means) against the value of a Companies assets, that being the VH Groups or Blackburn Rovers.

(correct me if I am wrong)

[Mc Love]

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.

I must admit this has instilled a bit of confidence in the deal for me!

[broadsword]

What happens if Venky's takes us over and decides it was a mistake, can they flog us to any passing chancer, or will they have to jump through the same hoops that the Trust had to jump through?

If Venky's have such a great development plan (and aren't looking for Man City-style investment, but more like Crewe-style financing), then why haven't the Trust - the custodians of Jack Walker's vision - tried something similar? Are they not the custodians of Jack's wishes? Why haven't they tried all practicable means to run the club within a given budget before selling it off?

I don't like the club being in foreign hands, and I have an unspecific anxiety that this will all end in tears. If it all does go horribly wrong, then the Trust will be bricking it, because they're likely to see some aggro coming their way.

If they realise they've taken on a white elephant, what's to say they don't shoot it?

[Wing Wizard Windy Miller]

Can't weigh this up. On the face of it we are basically going to have an Indian version of the trust. They will expect the club to wash its face with minimal investment. The link with Kentaro seems more based on the media side, so perhaps no production line of players. Don't get me wrong, £5 million transfer kitty is better than nothing, but still only buys us half the goalscorer we need (especially if it needs to include wages) Hopefully it will be £5 million per window.

Two or 3 years ago this would have been a good deal, allowing Hughes to strengthen a decent squad with someone like Diarra.

However, comparatively our squad is a lot poorer and other clubs have moved on.

This kind of money will still not allow us to compete with Stoke, Sunderland, Fulham etc.

So as I see it, the plus side is it's better than we have now!

Down side;

We still can't sign much quality - does this £5million include wages?

We will still sell our good players - the only way we can overhaul the squad would be to sell Jones in summer.

We will still play shyte football.

Can't help but get the feeling this takeover is simply a financial safe guard against relegation.

If this is really the best offer on the table then so be it, we have to see how it pans out.

[BuckyRover]

Syed will be there to pick up the pieces. Don't worry....

[broadsword]

Can't weigh this up. On the face of it we are basically going to have an Indian version of the trust. They will expect the club to wash its face with minimal investment. The link with Kentaro seems more based on the media side, so perhaps no production line of players. Don't get me wrong, £5 million transfer kitty is better than nothing, but still only buys us half the goalscorer we need (especially if it needs to include wages) Hopefully it will be £5 million per window.

Two or 3 years ago this would have been a good deal, allowing Hughes to strengthen a decent squad with someone like Diarra.

However, comparatively our squad is a lot poorer and other clubs have moved on.

This kind of money will still not allow us to compete with Stoke, Sunderland, Fulham etc.

So as I see it, the plus side is it's better than we have now!

Down side;

We still can't sign much quality - does this £5million include wages?

We will still sell our good players - the only way we can overhaul the squad would be to sell Jones in summer.

We will still play shyte football.

Can't help but get the feeling this takeover is simply a financial safe guard against relegation.

If this is really the best offer on the table then so be it, we have to see how it pans out.

Exactly it's *not very good*. But it stops the Trust having to make any sort of effort with the red-headed step-child of the Trust family, so they're doing it.

I don't like it, I think it's a s****y idea.

[Hughesy]

http://www.telegraph.co.uk/sport/football/teams/blackburn-rovers/8088386/Sam-Allardyce-to-get-6million-to-spend-from-Indian-takeover-of-Blackburn-Rovers.html

Some worries are slowly being answered abit more....

So now a national, respected paper says they have £1bn revenues & £100m+ profits per annum.....Would they also get it wrong??

Then we have "Micky Aigner from Times of India says Venkys are a huge company- money is not an issue in taking control of Rovers"

We then also have:

• No leveraged borrowing – equity basis, so no borrowing from banks.
  
• Takeover expected to be complete next Thursday
  
• Kentaro brokered the deal.....looks like they will be used more to help market us, and get us bigger revenues....whilst also offering us players, which the manager has control over who we do & dont take.
  

[Mc Love]

If it all does go horribly wrong, then the Trust will be bricking it, because they're likely to see some aggro coming their way.

Flybe will be seeing some reduction in flights particularly from rovers fans I'd assume

[adopted scouser]

However I still find it in poor taste.

Poor taste my arse, absolutely hilarious. It had its own thread here > http://www.brfcs.co.uk/mb/index.php/topic/23303-sam-on-twitter/