The Texan is on the verge of a £280million deal with The
Blackstone/GSO Group to retain his share in the cash-stricken club
and buy out partner George Gillett.
Despite the hatred towards him on Merseyside, Hicks told the
rest of the Anfield board in a meeting this week the refinance
agreement will be signed by October 1.
But in a move which will cause deep despair on Merseyside, the
terms would ensure the American has until 2012 to find a
buyer.
More worryingly for distraught Kop fans, the GSO deal does not
involve any injection of cash for new players OR a new stadium. And
it will almost certainly lead to the departure of Fernando Torres
and Pepe Reina.
That prospect is prompting the rest of the Liverpool board to
mount a legal challenge to stop Hicks finalising negotiations but
even those closest to the deal fear there is little they can do to
prevent him taking full control of the club.
Hicks convened a three-hour board meeting in London on
Wednesday, where he delivered the bombshell news of his plans to
deal with Blackstone/GSO.
Blackstone are one of the biggest private equity firms in the
world with its chairman Steve Schwarzman worth an estimated
£3billion. He is also a close friend of Hicks.
The meeting at the Blackstone HQ in London's Hanover Square was
attended by chairman Martin Broughton, chief exec Christian Purslow
and director, Ian Ayre and Finance Director Philip Nash.
Tellingly, co-owner George Gillett was absent from those
talks.
He's given Hicks the green light to pursue a deal and is
reluctant to ally himself to the rest of the board against the
Texan. Gillett has, however, told Hicks his support is conditional
on investment in the squad and stadium. That may yet prove the key
to blocking a deal.
However, Gillett has defaulted on his own loan to RBS, forcing
him to concede a degree of power to his business partner.
Hicks told his board he has no obligation to sell to any
investor for less than a price he deemed acceptable - and the board
has no authority to prevent him repaying the RBS debt and keeping
the club with whatever funds he likes.
Hicks bluntly told Broughton the idea of Liverpool being
sold for the value of the club debt - £282m - is
unacceptable.
Hicks believes he has the legal right to pursue the GSO deal in
the absence of any formal bid for the club since the sale process
began.
Despite feverish speculation at the time, neither Chinese
businessman Kenny Huang nor Syrian Yayha Kirdi ever made an offer
for Hicks and Gillett's shares.
Hicks will attempt to present GSO's involvement as a step in the
right direction, despite the obvious concerns.
The Texan thinks the involvement of Blackstone offers a platform
for further investment. Club sources are baffled as to why, having
failed to sell the club for the last two years at such a high
valuation, Hicks still believes he'll succeed in two
more.
Purslow, Ayre and Broughton have successfully resisted refinance
proposals before because they believe Hicks is reneging on his
public announcement in April that he wished to sell his shares.
This dispute has been the subject of a legal battle since June but
there was always a fear the respite was temporary. A court hearing
to decide the future of Liverpool FC now looks
inevitable.
By 2012, the value of the club is more likely to have plummeted
due to consecutive years without Champions League
football.
As Sport of the World first revealed a month ago, Anfield is in
the grip of a boardroom war over refinancing.
Behind the scenes, the most ferocious battle to decide the
future of the club is being fought right now.
The outcome is likely to be decided in various legal offices of
America and London. The only other hope is for a credible buyer to
make an 11th-hour bid for the club. Hicks' proposals do not have
the support of chairman Broughton, MD Christian Purslow or
commercial director Ayre.
The independent Kop board fears the GSO deal represents a
nightmare scenario for the club and destroys any hope of a brighter
future at Anfield.
There are claims it will end any chance of a new stadium and
lead to the inevitable departures of star men.
Players such as Torres and Reina have openly demanded a change
of ownership. Extending a period of limbo will effectively ensure
this is their last season at the club.
Planning permission for the new arena on Stanley Park will have
expired by September, 2011. And the GSO deal will also mean the
debt against the club rises and interest rates increase.
This doomsday picture will be contested by Hicks, who is in
talks with Blackstone's senior managing director and GSO co-founder
Bennett Goodman.
The US equity firm Blackstone, who own GSO, is one of
the most wealthy and well respected in the financial
world.
Their chief executive, Schwarzman, is worth an estimated £3bn
and has been dubbed The King of Wall Street during an impressive
financial career.
The 63-year-old was listed in 2008 as America's 53rd-richest
person. A year earlier, Time magazine named him as one of the 100
most influential men in the world. He lists former Presidents and
White House chiefs of staff among his friends.
Blackstone's portfolio is vast and striking, including the
London Eye. In normal circumstances, if such a company was
interested in a full buy-out it would be a relief for Kop
fans.
But there is unease because GSO have not declared any wish to
take over the club, heavily invest in the squad, plough in finance
for the stadium or retain any long-term interest.
They represent a short-term fix for Hicks. The only way
Blackstone will own Liverpool FC is if Hicks defaults on his fresh
loans in two years.
Blackstone/GSO's offer to Hicks effectively amounts to a
multi-million bail-out.
They are loaning Hicks the money he desperately needs to
refinance the £282.4m RBS debts and buy him extra time. Hicks will
now have even longer to sell the club at the valuation of £600m
he's been pursuing since the sale process began in April.
Just when Liverpool fans hoped the end of the American reign was
nigh, they're now faced with the reality the period of uncertainty
may continue.
Disillusionment among players and fans is already at epidemic
levels.
The position of the current five-man board would also be subject
to review. Barclays Capital's involvement in the sales process
would effectively be over, as would Broughton's tenure as
chairman.
That's why the rest of the Anfield hierarchy is desperate to
block the deal and is adamant any refinance using Liverpool as
collateral is illegal.
They have just two weeks to stop Hicks and find a buyer. Hicks
expects terms to be signed by October 1, when the first chunk of
the RBS debt must be repaid.
It's baffling to some why a financial tour de force such as
Schwarzman is assisting Hicks.
GSO specialise in investing in distressed companies at high
rates of interest but Hicks also appears to be benefiting from a
personal friendship and political alliance with Blackstone's top
man.
Cynics are already concluding that Hicks has convinced an old
pal to help him out in a period of strife.
"A few weeks ago we were saying Hicks needed to pull a rabbit
out of the hat," a Kop source told Sport of the World.
"It seems he's pulled out one of the biggest, wealthiest rabbits
in Wall Street."
