sisu are not good for our club - well someone's got to say it! (5 Viewers)

[Deleted member 5849]

There is nothing to get us back renting though and then ACL turn round and say they don't want to sell. By the time they have written contracts, done deals and terms they may as well just buy it.

It is catch 22.

In which case you make it part of the short term rental deal, that there's a roadmap to binding arbitration, where both parties agree to accept whatever the conclusion of that process is.

 

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[letsallsingtogether]

Come on Nick you were at the same forum as me.... they don't want to buy, want a long lease with ACL gone and ML and AEG in place so he gets his cut.
This is all about money and nothing to do with CCFC

There is nothing to get us back renting though and then ACL turn round and say they don't want to sell. By the time they have written contracts, done deals and terms they may as well just buy it.

It is catch 22.

 

[Godiva]

In which case you make it part of the short term rental deal, that there's a roadmap to binding arbitration, where both parties agree to accept whatever the conclusion of that process is.

It sound reasonable, but we know what happened last time there was a roadmap and signed HoT's.

 

[Deleted member 5849]

It sound reasonable, but we know what happened last time there was a roadmap and signed HoT's.

Process wouldn't just be guided by the involved parties this time though, would it.

 

[Nick]

Come on Nick you were at the same forum as me.... they don't want to buy, want a long lease with ACL gone and ML and AEG in place so he gets his cut.
This is all about money and nothing to do with CCFC

Of course it's about money but to get ACL gone they need to buy them out in one way or another to get the lease.

I was probably watching the Arsenal game at that point when it was said to be fair!

 

[Nick]

In which case you make it part of the short term rental deal, that there's a roadmap to binding arbitration, where both parties agree to accept whatever the conclusion of that process is.

I wouldn't trust either side with these kinds of deals though.

 

[Godiva]

Process wouldn't just be guided by the involved parties this time though, would it.

Maybe not, and I fully agree the idea is good. So how do we get the Trust, KCIC, NOPM, SOC and everyone else to back it?

 

[Nick]

Process wouldn't just be guided by the involved parties this time though, would it.

If it was more public with some sort of "referee" then it could work!

 

[sky blue john]

Lol.
Its funny how usual suspects talk about a deal.
Sisu buying Acl LMFAO !!!
When will some of you wake up and realize that Sisu don't want a deal. They value Acl and the Ricoh at Zero pounds.
Never going to happen !!
Only one solution " New Owners Required"

 

[Nick]

Its funny how the usual suspects talk about the usual suspects and then spout things like that. Where has the Ricoh been valued at £0 by anybody?

 

[sky blue john]

Hello Nick, you talk about a deal being possible. But does that not take someone to make an offer ?
Hold on maybe you think that the 2million to the Higgs trust was an offer ?
Did not Joys secretary claim that to be a charitable donation ???

 

[Nick]

Hello Nick, you talk about a deal being possible. But does that not take someone to make an offer ?
Hold on maybe you think that the 2million to the Higgs trust was an offer ?
Did not Joys secretary claim that to be a charitable donation ???

Surely it was an offer? The same as the other over priced offer?

 

[SkyblueBazza]

Steve Gibson chairman of Middlesbrough is one Chairman I can think of, the chap at forest who died, Dave Whelan, there are plenty of great chairmen out there who put there love of the club and fans first and have sunk millions of their own money into their respective clubs.

That being said I agree the club needs to be run as a sound business and anyone who doesn't think that isn't in the real world.

I accept that they plough millions in...but is it for the fans? Or is it for the fan's adulation? Hero status? The power? The publicity? Etc
They personally get something out of! They're ruthless business people that make their millions & billions by having that very mentality! Some of them also have a soft spot for club/fans as well but it's not their prime motivator.


PUSB

 

[martcov]

I accept that they plough millions in...but is it for the fans? Or is it for the fan's adulation? Hero status? The power? The publicity? Etc
They personally get something out of! They're ruthless business people that make their millions & billions by having that very mentality! Some of them also have a soft spot for club/fans as well but it's not their prime motivator.


PUSB

I think that is the point. Any Prime motivator that doesn't involve rescuing investor's money at any cost is better than what we have. If Joy didn't care about the money ( to a point ), but wanted our adulation, we would be playing at the Ricoh with top signings. I would prefer someone like Red Bull as major shareholder. They tend to get involved in sport projects to acheive success, thus promoting their product image. A win win situation.

 

[_brian_]

I think that is the point. Any Prime motivator that doesn't involve rescuing investor's money at any cost is better than what we have. If Joy didn't care about the money ( to a point ), but wanted our adulation, we would be playing at the Ricoh with top signings. I would prefer someone like Red Bull as major shareholder. They tend to get involved in sport projects to acheive success, thus promoting their product image. A win win situation.

Exactly! I'd happily be called the Red Bull Red Skies, play in red and change our badge to a bull if it meant getting rid of We-Sue and having a chance to possibly maybe getting promoted to the Premier League!!!

 

[The Prefect]

Surely it was an offer? The same as the other over priced offer?

In many respects you're right however, when you sign Heads of Terms on a deal of £5.5m you would expect the deal to go through at that price. Due diligence is to identify that what you're being told about the Company is substantially true.

Court record confirms that SUSU's due diligence wasn't completed in the agreed timescale and yet a counter offer of £2m was made based on 'increased risk to SISU'. Also, no proof of funding was provided by SISU.

It is obvious that due diligence didn't uncover anything untoward. It never does. It is performed by auditors / accountants. In all my years in business I have met accountants that are worth their weight in gold. As for auditors I haven't met one that was worth their fee. The reason for this is that they base their opinion on what they're being told so their hands are tied other than to check the ledgers and tax implications. Pulling the wool over the eyes of an auditor is easy - ask the Board of Enron.

I spoke to a friend of mine who was Finance Director of a £500m company. Counter offer of £2m based on a HoT agreement of £5.5m due to 'increased risk'. "It's easy," he said. "The buyers wanted to pull out."

Excessively low offers to acquire aren't really offers at all. It seems that in 2012 SISU valued the Ricoh at between £25m and £29m being the £5.5m for 50% share in ACL plus the outstanding mortgage that was at least £14m but could have been as high as £19m.

Things then went from £25m to £18m and then to zero and 'sign the Ricoh freehold over to us for nothing and get rid of ACL while you're doing it'. The buyers didn't want to buy and the Higgs Court case confirmed that.

 

[Godiva]

In many respects you're right however, when you sign Heads of Terms on a deal of £5.5m you would expect the deal to go through at that price. Due diligence is to identify that what you're being told about the Company is substantially true.

Court record confirms that SUSU's due diligence wasn't completed in the agreed timescale and yet a counter offer of £2m was made based on 'increased risk to SISU'. Also, no proof of funding was provided by SISU.

It is obvious that due diligence didn't uncover anything untoward. It never does. It is performed by auditors / accountants. In all my years in business I have met accountants that are worth their weight in gold. As for auditors I haven't met one that was worth their fee. The reason for this is that they base their opinion on what they're being told so their hands are tied other than to check the ledgers and tax implications. Pulling the wool over the eyes of an auditor is easy - ask the Board of Enron.

I spoke to a friend of mine who was Finance Director of a £500m company. Counter offer of £2m based on a HoT agreement of £5.5m due to 'increased risk'. "It's easy," he said. "The buyers wanted to pull out."

Excessively low offers to acquire aren't really offers at all. It seems that in 2012 SISU valued the Ricoh at between £25m and £29m being the £5.5m for 50% share in ACL plus the outstanding mortgage that was at least £14m but could have been as high as £19m.

Things then went from £25m to £18m and then to zero and 'sign the Ricoh freehold over to us for nothing and get rid of ACL while you're doing it'. The buyers didn't want to buy and the Higgs Court case confirmed that.

It's a nice essay and you quote a lot of numbers.
But you fail to tell why the counteroffer was lower ... what was the reason the risk was increased?
If you had told your FD friend the whole story would his answer not have been different?

 

[Jack Griffin]

It's a nice essay and you quote a lot of numbers.
But you fail to tell why the counteroffer was lower ... what was the reason the risk was increased?
If you had told your FD friend the whole story would his answer not have been different?

He gave his opinion why, they wanted it to be rebuffed..

 

[Astute]

It's a nice essay and you quote a lot of numbers.
But you fail to tell why the counteroffer was lower ... what was the reason the risk was increased?
If you had told your FD friend the whole story would his answer not have been different?

Would he have had long enough to have told him the way that SISU have done their dealings with our club so far, like 'It is all about the rent, it is all about the pie money' through to 'we will only accept unencumbered freehold' They would never have changed their minds, or not even had any intentions of going through with the deal.......would they? :thinking about:

 

[James Smith]

Surely it was an offer? The same as the other over priced offer?

Yeah it was an offer but hadn't we reached the stage by then that Sisu had valued the Higgs share at £0.00. The judge even said

Mr Justice Leggatt: Sorry you're suggesting she thought the company was worth nothing, but still would pay 5.5 million for it?

Laura Deering: She recognised that they were a charity, yes.

Mr Justice Leggatt: You're not a charity are you?

Laura Deering: No

Mr Justice Leggatt: Why would she pay 5.5 million for something worth nothing?

Laura Deering*: I don't know. I don't make the final decision. I can only --

Mr Justice Leggatt: Okay.

*who isn't a secretary as far as I know if the Sisu lawyers are reading this.

 

[The Prefect]

It's a nice essay and you quote a lot of numbers.
But you fail to tell why the counteroffer was lower ... what was the reason the risk was increased?
If you had told your FD friend the whole story would his answer not have been different?

Possibly. Possibly not.

It's difficult to know and I understand your point. Any acquisition involves 'increased risk' and yet given that SISU agreed HoT at £5.5m. I doubt we'll ever know the nature of the 'increase' in risk that justifies a 60% reduction of the offer or whether there was any increase in risk at all. In the acquisitions I've worked on there is disclosure of facts (usually backed by confidentiality clauses) prior to reaching HoT - that's the point when the price has been agreed. A huge amount of disclosure and work is done before HoTs are ever signed.

A few minutes ago I asked the question whether there is anything that would substantiate any level of 'increased risk' between a HoT and completion of due diligence and his answer was that contingent liabilities or charges due to mortgages etc might be the reason. That could be the answer, who knows? Contingent liabilities are usually stated in the notes to the accounts and SISU knew about the mortgage prior to HoT so I have my doubts in this instance.

'Increased risk' - maybe, maybe not. Could it be a catch-all that allows any deal to fall through when its convenient to the buyer?

 

[Godiva]

Possibly. Possibly not.

It's difficult to know and I understand your point. Any acquisition involves 'increased risk' and yet given that SISU agreed HoT at £5.5m. I doubt we'll ever know the nature of the 'increase' in risk that justifies a 60% reduction of the offer or whether there was any increase in risk at all. In the acquisitions I've worked on there is disclosure of facts (usually backed by confidentiality clauses) prior to reaching HoT - that's the point when the price has been agreed. A huge amount of disclosure and work is done before HoTs are ever signed.

A few minutes ago I asked the question whether there is anything that would substantiate any level of 'increased risk' between a HoT and completion of due diligence and his answer was that contingent liabilities or charges due to mortgages etc might be the reason. That could be the answer, who knows? Contingent liabilities are usually stated in the notes to the accounts and SISU knew about the mortgage prior to HoT so I have my doubts in this instance.

'Increased risk' - maybe, maybe not. Could it be a catch-all that allows any deal to fall through when its convenient to the buyer?

Well, one thing we know is different between the two offers is the purchase and discharge of the YB mortgage. The £5.5m offer was coupled with sisu buying the loan at a discount rate and discharge it. (I have a few times expressed my doubt if that would be possible, but that was still one of the conditions). Buying the loan at a discount would increase the value of ACL - so a higher price could be justified.
The £2m offer was made when Higgs asked for a straight buy out offer. In this case there were no guarantee that the mortgage could be bought at a discount and so the risk was higher - hence the lower valuation.

I am sure if you ask your FD friend if he agree the lower offer could be justified due to uncertainty of the company value his reply would be 'yes, possibly'.

 

[The Prefect]

Well, one thing we know is different between the two offers is the purchase and discharge of the YB mortgage. The £5.5m offer was coupled with sisu buying the loan at a discount rate and discharge it. (I have a few times expressed my doubt if that would be possible, but that was still one of the conditions). Buying the loan at a discount would increase the value of ACL - so a higher price could be justified.
The £2m offer was made when Higgs asked for a straight buy out offer. In this case there were no guarantee that the mortgage could be bought at a discount and so the risk was higher - hence the lower valuation.

I am sure if you ask your FD friend if he agree the lower offer could be justified due to uncertainty of the company value his reply would be 'yes, possibly'.

Agreed.

It is difficult to follow all the ins and outs but I confess that I wasn't aware that part of the HoT was buying the YB mortgage at a discount. I'm not quite sure how you would contract that into a HoT agreement.... Especially as the YB hadn't been approached and confirmed a selling price.

Like you I have my doubts whether YB would have discounted the mortgage any more than they did when CCC bought it. It all seems to confirm that the deal was going nowhere fast.

 

[Godiva]

Agreed.

It is difficult to follow all the ins and outs but I confess that I wasn't aware that part of the HoT was buying the YB mortgage at a discount. I'm not quite sure how you would contract that into a HoT agreement.... Especially as the YB hadn't been approached and confirmed a selling price.

Like you I have my doubts whether YB would have discounted the mortgage any more than they did when CCC bought it. It all seems to confirm that the deal was going nowhere fast.

I don't think it was part of the HoT with Higgs, but it was in the LOI with ACL and part of the infamous 'Roadmap' - so everyone at least knew there were a few issues that should fell into place before everyone could sign at the dotted line.

Still - the deal went dead in August 2012 (just days after the LOI with ACL was signed!). Mr Harris from Higgs came back from his holiday believing everything was on track, only to be ordered to step aside. It is every ones guess what exactly went wrong, but as usual don't believe the spin the parties put on it.

I may be wrong, but if the council and Higgs were told that the former ACL chairman was going to YB, then it is safe to believe they would do whatever they could to distance themselves from the plan to distress the YB loan. That could explain the 'August report' from Mr West - in which it is suggested to go to the bank on their own and leave sisu/ccfc behind. Even if that would mean the risk of sisu pulling the support for the club and liquidate it.
(What happened will be the centre point of the JR. Sisu will argue that public money was spent where private capital could have been used and that it was unfair trade.)

In any case - it was only after ACL decided to abandon the deal with the club that Higgs went back and asked for an offer in a stand-alone deal.

 

[James Smith]

I don't think it was part of the HoT with Higgs, but it was in the LOI with ACL and part of the infamous 'Roadmap' - so everyone at least knew there were a few issues that should fell into place before everyone could sign at the dotted line.

Still - the deal went dead in August 2012 (just days after the LOI with ACL was signed!). Mr Harris from Higgs came back from his holiday believing everything was on track, only to be ordered to step aside. It is every ones guess what exactly went wrong, but as usual don't believe the spin the parties put on it.

I may be wrong, but if the council and Higgs were told that the former ACL chairman was going to YB, then it is safe to believe they would do whatever they could to distance themselves from the plan to distress the YB loan. That could explain the 'August report' from Mr West - in which it is suggested to go to the bank on their own and leave sisu/ccfc behind. Even if that would mean the risk of sisu pulling the support for the club and liquidate it.
(What happened will be the centre point of the JR. Sisu will argue that public money was spent where private capital could have been used and that it was unfair trade.)

In any case - it was only after ACL decided to abandon the deal with the club that Higgs went back and asked for an offer in a stand-alone deal.

I think I've followed and understood what you've been talking about but something is bugging me. Why did Sisu think that they would be able to get the mortgage cheaply when we now know that the council were told to do one when they came in with offers under £10-12m.

 

[fernandopartridge]

In which case you make it part of the short term rental deal, that there's a roadmap to binding arbitration, where both parties agree to accept whatever the conclusion of that process is.

Indeed. No solutions are ever considered as a means to an end. We always want the end in itself as the solution.

 

[fernandopartridge]

Agreed.

It is difficult to follow all the ins and outs but I conagreedfess that I wasn't aware that part of the HoT was buying the YB mortgage at a discount. I'm not quite sure how you would contract that into a HoT agreement.... Especially as the YB hadn't been approached and confirmed a selling price.

Like you I have my doubts whether YB would have discounted the mortgage any more than they did when CCC bought it. It all seems to confirm that the deal was going nowhere fast.

Indeed. Quite strange to have a contract between two parties reliant on the actions of a third party.

 

[Godiva]

I think I've followed and understood what you've been talking about but something is bugging me. Why did Sisu think that they would be able to get the mortgage cheaply when we now know that the council were told to do one when they came in with offers under £10-12m.

Look at sisu as a hedge fund and forget their merits as a football club owner - they are presumably experts at dealing with distressed debt. They should know all about that.
Accept that they might have done their homework and would know exactly what valuation YB would have on the mortgage (to a company in bad financial state about to lose their main tenant).

What sisu didn't know was the ACL chairman would quit his position after 'the roadmap' was discussed and then become a director at YB (in October?).

 

[James Smith]

Look at sisu as a hedge fund and forget their merits as a football club owner - they are presumably experts at dealing with distressed debt. They should know all about that.
Accept that they might have done their homework and would know exactly what valuation YB would have on the mortgage (to a company in bad financial state about to lose their main tenant).

What sisu didn't know was the ACL chairman would quit his position after 'the roadmap' was discussed and then become a director at YB (in October?).

Yeah I can see that as a distinctly possible reason, it's more likely than Sisu just guessing that the YB would roll over easily when they came knocking. Sorry for the tardy reply but I had a few issues with my phone one of them being I left it with a mate accidentally down the back of his sofa.

 

[_brian_]

Yeah I can see that as a distinctly possible reason, it's more likely than Sisu just guessing that the YB would roll over easily when they came knocking. Sorry for the tardy reply but I had a few issues with my phone one of them being I left it with a mate accidentally down the back of his sofa.

"...accidentally down the back of his sofa"!!! Oh yeah?!?! Nudge nudge, wink wink, say no more!!! LOL!!! Only joking!!! I don't think you really got up to anything with your mate! And even if you did, it's quite possible that your mate's female, so that's fine anyway! Well, it would be fine if your mate was male as well - each to their own and all that! So all I'm saying* is if you did or did not get up to anything with or without your mate who might or might not be male or female, then that's none of my business!!!

(*Typing.)

 

[DaleM]

"...accidentally down the back of his sofa"!!! Oh yeah?!?! Nudge nudge, wink wink, say no more!!! LOL!!! Only joking!!! I don't think you really got up to anything with your mate! And even if you did, it's quite possible that your mate's female, so that's fine anyway! Well, it would be fine if your mate was male as well - each to their own and all that! So all I'm saying* is if you did or did not get up to anything with or without your mate who might or might not be male or female, then that's none of my business!!!

(*Typing.)

Post of the week material ?

 

[James Smith]

"...accidentally down the back of his sofa"!!! Oh yeah?!?! Nudge nudge, wink wink, say no more!!! LOL!!! Only joking!!! I don't think you really got up to anything with your mate! And even if you did, it's quite possible that your mate's female, so that's fine anyway! Well, it would be fine if your mate was male as well - each to their own and all that! So all I'm saying* is if you did or did not get up to anything with or without your mate who might or might not be male or female, then that's none of my business!!!

(*Typing.)

His Mrs was there and we had been playing Wii Sports after the pub and Mr "Expert at this" either needs more practice, especially at the bowling or less alcohol but either way he came third in most things. Wouldn't like to meet his wife with a real baseball bat as she can really swing the plastic one they've got for their controllers.