The proposed £300million takeover of Newcastle United has dramatically collapsed after the Saudi-backed buyers withdrew their bid.
A consortium bankrolled by Saudi Arabia’s Public Investment Fund, and spearheaded by businesswoman Amanda Staveley, agreed a deal with Newcastle owner Mike Ashley in April.
However, the takeover fell through amid four months of scrutiny from the Premier League following concerns over piracy and human rights complaints in Saudi Arabia, leaving 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on Thursday, Saudi Public Investment Fund (PIF), PCP Capital Partners and RB Sports & Media announced it has formally withdrawn from the takeover process.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.
Sources close to the Saudis have also claimed that Ashley tried to ‘significantly renegotiate’ the £300m deal at the last minute, which contributed to the takeover collapsing.
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.
The group were angered after Ashley tried to ‘significantly renegotiate’ the agreed £300m price following the expiry of the exclusivity deal which was signed four months ago.
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.
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.