Archives

Evening Standard

Keith Harris is locked in negotiations that could bring the reign of Liverpool’s unpopular American owners to an end but his experiences over the past year tell him not to get too excited.

The former Football League chairman has seen deals for Everton and Newcastle collapse in bizarre circumstances and was also a leading light in the failed bid to oust the Glazer family from Manchester United.

In the hot seat: Keith Harris played a part in the takeovers of Aston Villa, West Ham and Manchester City and is still keen on getting deals for Liverpool and Manchester United. Image courtesy of Evening Standard.

A previous attempt to wrest ownership of Liverpool from George Gillett and Tom Hicks for a Kuwaiti he dubbed “The Man in the Sand” also collapsed at the 11th hour so Harris is not about to get carried away as talks progress with the group his investment firm Seymour Pierce has been advising.

“The overseas buyer we represent has completed due diligence. A huge amount of work has been done,” he says of a deal that would cost between £400-500million.

Neither was the 57-year-old particularly concerned that months of hard work were threatened by Kenny Huang’s attempts to install himself at Anfield, allegedly with the help of the Chinese government.

It came as no surprise when the businessman abandoned his takeover last week. “The Chinese government involvement was always a bit far-fetched,” he says.

“In any takeover situation, when people resort to announcing it to the media, you have to question the seriousness of the offer.

“If the name of the prospective buyer comes out before the deal is done then probably it is never going to be done.

“Look at when Chelsea was sold in 2003. My firm was advising the club and we only knew of Roman Abramovich on the Thursday before the deal was completed the following Tuesday.”

Harris will not disclose the name of the buyer he is now advising but says: “It is none of the groups mentioned in the press.

“The ball is now in our client’s court to make an offer. I do not think the deal will be done before the transfer window closes this month but the next pressure point is October when some of the RBS loan of £237m has to be repaid. It may happen then. But in the present climate these things are impossible to predict.”

Harris has played his part in takeovers at Premier League clubs Aston Villa (Randy Lerner), West Ham (Eggert Magnusson) and Manchester City (Thaksin Shinawatra) and, two years ago, he was working for another would-be buyer, Nasser Al Khorafi, a member of the powerful and clan-like Kuwaiti family interested in acquiring Liverpool.

Khorafi has been mentioned again as a possible buyer but, in 2008, this long- standing Liverpool fan was so keen to keep his name a secret that Harris was involved in cloak-and-dagger secrecy.

“I had to give Khorafi a pseudonym, ‘The Man in the Sand’ and Liverpool were identified as ‘The Target’. After being vetted, I had to travel to a hotel in Lebanon’s Bekaa Valley. For a time, I was the only guest. Then The Man in the Sand turned up.”

Getting the American owners, who were then barely on speaking terms, together was also not easy.

“They met in Montreal under the auspices of the commissioner of the National Hockey League, who acted as a sort of referee,” says Harris.

“The Man in the Sand eventually met Gillett and his son, Foster, when they came for tea at my Chelsea home.”

Khorafi agreed to pay £300m for the equity with an additional £100m depending on Liverpool’s financial performance. But then, two hours before the deal was due to be signed, Harris received an email saying the buyer had changed his mind.

“He just lost his appetite,” says Harris. “No explanation was forthcoming.”

Harris was unable to contact Khorafi and eventually instructed lawyers to recover his fees. The collapse of deals for Everton and Newcastle proved equally frustrating.

“In the case of Newcastle it was a funded offer which was then declined by the owner,” says Harris.

Mike Ashley, the Newcastle owner, wanted £100m and, reveals Harris, “the offer by Barry Moat wasn’t very much lower”. So having put the club up for sale and with many Toon supporters keen to get rid of him, why did Ashley reject popular local businessman Moat? “All I can say is the offer didn’t hit his target.”

And Everton? “Ah,” says Harris, with a sigh. “There the would-be buyers, both of them British, turned out to be very flaky. When they had to show up with the money, they disappeared. They led everybody a merry dance.”

Harris says the difficulty in finding suitable buyers for the country’s leading clubs is because “wealth has shifted very substantially away from the West and resides in the Middle-East and in the economic boom countries of the world – China, India and South-East Asia.”

He adds: “The Premier League is a great brand but owning a football club is not a must. It’s like the second or third home, the yacht or the private plane – a trophy asset. The Manchester City phenomenon [the club was purchased by Abu Dhabi businessman Sheikh Mansour, who then cleared their debts] was exceptional and it is not easy to see it being repeated.”

The one takeover Harris would love a third crack at engineering is that of his beloved Manchester United, a club he has supported since he was six.

He concedes that hopes of the Red Knights, of which he was a member, buying it from the Glazers are dead. “Their interest in buying remains undiminished but the Glazers gave very clear and loud signals that the business was not for sale. And for the time being that is the end of it,” he says.

The Glazers’ opposition meant that the Red Knights never made an offer, or even had a meeting with them. The sticking point was the price. “The Glazers would want £1.5billion,” claims Harris. “The Red Knights would have been prepared to go up to a billion.”

He says the Knights had 30 eager investors, each prepared to contribute a minimum of £10m – “They said: ‘Yes, we’d like to be a part of this’.”

They were prepared to invest in Manchester United despite the club owing £800m – and this included interest rates on some of the debt which increase the longer the money is not repaid.

Against that background Harris insists: “It’s important that people don’t overpay in this environment.”

Was it not a problem that the Red Knights’ effort was never supported by the most important man at Old Trafford, Sir Alex Ferguson?

As I mention the manager’s name Harris goes very quiet. “Um, what you have to say is that Alex has been hugely successful and part of that success is being a very loyal, senior member of the team and you wouldn’t expect anyone in his position to say anything different from what he said.”

Did the Red Knights try speaking to Sir Alex? “I don’t – I don’t really want to go down that path,” says Harris, adding: “Football clubs don’t enjoy success without a break, it has never happened. Manchester United’s success in this era has lasted 17 years, which is longer than most.

“But clearly there is more competition coming with Chelsea and Manchester City and Alex has to contemplate retirement. The protest against the Glazers is about the debt they have put on the club and a fear over what happens tomorrow rather than a condemnation of what has been happening until now.”

But even if the Glazers had been prepared to sell, was not the Red Knights’ concept flawed as David Gill, United’s chief executive, suggested? How can any football club, let alone one the size of United, be run by a committee?

Harris, surprisingly, agrees with Gill. “No one can deny that. You can’t have seven or eight people making decisions. What you can have is an agreement on policy issues. But nobody in the Red Knights’ group suggested that David Gill should not be running the club after a takeover.”

The saga also marks a remarkable change in Harris’s relationship with United fans – from villain to trusted adviser. In 1998 when Rupert Murdoch’s Sky bid for the club, Harris was advising the United board and was anathema to the fan groups opposing the bid.

“The fans took against me then,” he admits. “It was in part a lack of understanding of what is required of a financial adviser. The duty of a financial adviser of a public company is to advise shareholders whether the terms that are offered are fair and reasonable. And the price of £650m offered by BSkyB was a fair one, a huge offer.”

Harris began to work his passage back with the fans when, in 2005, he tried to stop the Glazer takeover by organising an alternative fans buy-out with the help of investment bankers Nomura.

“On paper, something like 15 or 17 per cent of the shares were in the hands of fans, a mighty amount in terms of defending a takeover. But they were in the hands of thousands of supporters and a lot of them, to be blunt, wouldn’t really understand the mechanics of the takeover. Although we tried hard, against a public company takeover timetable, it just proved impossible. Had there been three or four major shareholders representing 10 or 15 per cent of shares, then something could have been done.”

But while Harris now cannot praise the fan groups organising the anti-Glazer protest enough, his advice to them is that, if they want the Glazers out, their protests must be more than just an emotional one.

“Waving the green and yellow colours of Newton Heath is very evocative. But do they persuade the owners that they ought to be selling? I would say categorically, ‘No’. If you are serious about change then you have to vote with your feet or your credit card. If you are a season-ticket holder and you don’t renew you are protesting.

“Then you are hurting them and if you really want change, that’s the way to do it.”

But even Harris cannot be sure how long the hurt will have to continue before the Glazers could be forced to vacate Old Trafford.

      

Share |

Comments

 

Latest Tweets

Follow me on twitter

Home | About | Books | History | BroadcastingJournalismPublic Speaking | Contact

MihirBose.com | Website development by Pedalo