Newcastle’s proposed huge £300million takeover from a Saudi Arabian-led consortium is off, it has been officially announced.
The news comes amid four months of scrutiny from the Premier League following concerns over piracy and human rights complaints in Saudi Arabia, leaving much-maligned owner Mike Ashley now without a buyer for the club.
And on Thursday, Saudi Public Investment Fund (PIF), PCP Capital Partners and RB Sports & Media announced it has formally withdrawn from the takeover process.
The news came as:
- The Saudi royalty-backed fund blamed ‘the prolonged process’ of the takeover – and the scrutiny it was under from the Premier League and Government – and the global uncertainty surrounding the coronavirus pandemic for the deal’s collapse.
- Deal broker Amanda Staveley said she was ‘heartbroken for the fans, the club and the community’.
- The Campaign Against Arms Trade called for a revamped ‘fit and proper persons test’ and for football clubs to ‘never be propaganda vehicles for dictatorships’.
- Scepticism continues to surround the reported rival £350m bid to buy the club from American television executive Henry Mauriss.
Newcastle owner Mike Ashley is once again without a buyer for the Premier League club
The proposed takeover had taken plenty of twists throughout, and on Thursday morning it took another after Saudi Arabia appealed against a landmark piracy ruling – which placed fresh question marks on the mega-money deal.
Last month the World Trade Organisation issued a report which found representatives of the Saudi state had facilitated the activity of the pirate network beoutQ, which illegally broadcast a host of sporting events including Premier League matches.
Saudi Arabia initially claimed the WTO’s ruling was a vindication, but the WTO has since confirmed receipt of an appeal against it.
Documents relating to a £300m takeover at St James’ Park from current owner Ashley were registered with the Premier League back in April but it had been scrutinised throughout under an owners’ and directors’ test due to piracy and human rights issues.
But on Thursday afternoon, a statement from the investment group – PIF, PCP Capital Partners and the Reuben brothers – cited the economic uncertainty caused by the coronavirus crisis as a major factor in the takeover falling through.
The statement read: ‘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.
The Public Investment Fund is state owned and chaired by ruler Crown Prince Mohammed bin Salman
‘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 pro-activity 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.’
The takeover would have seen Saudi Arabia’s Public Investment Fund gain an 80 per cent stake in the north east club.
The British-based Reuben brothers and financier Amanda Staveley were planning to each buy the remaining 10 per cent stakes to end the ownership of retail entrepreneur Ashley.
Amanda Staveley (pictured) and the Reuben brothers were planning to buy the remaining 10 per cent stakes in Newcastle
According to The Times, Staveley was in tears as she discussed the consortium’s decision to withdraw their £300m offer of Newcastle.
Staveley reportedly criticised the opposition from other Premier League clubs and the top flight delaying the approval.
‘We are heartbroken obviously,’ Staveley was reported as saying in The Times.
After being asked if she blamed the Premier League for dithering on the takeover approval, she replied: ‘Of course we do. They had a chance, they say we have not answered all the questions and we have done so. But the other clubs in the Premier League didn’t want it to happen.
‘We are so heartbroken for the Newcastle fans as the investment that was going to go into the club, especially with everything happening with Brexit and Covid, would have been so important. This is catastrophic for them.
The St James’ Park outfit had been the subject of a proposed £300million takeover for months
‘It has been going on for so long and the opportunity was there.’
But human rights campaigners have since welcomed the announcement that the Saudi Arabian-led takeover is off following months of uncertainty.
Andrew Smith of Campaign Against Arms Trade said: ‘This is the right outcome for the wrong reasons.
‘The negotiations should never have taken place. The history and character of the Saudi regime should have been enough to prevent it even being considered.
‘The message this deal would have sent is a terrible one. The FA must look at the fit and proper persons test and strengthen it to ensure that clubs are not entering negotiations with human rights abusers in the future. Football clubs should never be propaganda vehicles for dictatorships.’
Ashley will now keep the £17m deposit paid by the Saudi Arabian consortium as it was non-refundable.
Scepticism surrounds the reported rival £350m bid to buy the club from Henry Mauriss
A deposit of five per cent was agreed when the sale price was set at £340m — but it was reduced to £300m as economic circumstances changed. The deposit remained the same, however.
Now attention will turn to what is next for Newcastle owner Ashley and the club itself. There is plenty of scepticism surrounding the reported £350m rival bid from American businessman Henry Mauriss.
It was reported that Mauriss is ready to move quickly but it is not known why the American television executive has offered £50m more than what Ashley agreed from the Saudi-led consortium.
Little is known about Mauriss’ worth but he is the current CEO of Clear TV, who provide broadcasting services for airports and hospitals.
He set up the company in 2014 having previously started his own credit card business – Credit America Corporation – which he founded in 1998.