An investor group led by Saudi Arabia’s sovereign wealth fund has reached a £300 million deal to acquire Newcastle United Football Club from UK retail tycoon, Mike Ashley, Financial Times reports.
The agreement comes even as the world’s most popular sport faces an unprecedented disruption from the coronavirus pandemic, which has wreaked havoc on the global football schedule and halted the English Premier League with no indication of when the current season will be finished.
If completed, the deal will deliver another deep-pocketed Middle Eastern investor to global football. Saudi Arabia’s Public Investment Fund, which is steered by Crown Prince Mohammed bin Salman, is putting up roughly 80 per cent of the all-cash £300 million purchase price.
The deal is being structured through a vehicle created by Amanda Staveley, the British financier. Her PCP Capital Partners will put in 20 percent of the consideration for Newcastle, with 10 percent of the funds coming from Staveley personally and the remainder from David and Simon Reuben, the wealthy British property investors.
Documents filed at Companies House last week appear to show that the entity through which Mr Ashley owns the club is providing Staveley with a “vendor loan”, an arrangement where the seller of an asset lends money to the buyer to help them complete the transaction. The documents list as the loan’s security any potential proceeds from Staveley’s high-profile lawsuit against Barclays bank. The deal is however subject to approval from the Premier League, which may take as long as several weeks.
The investor group has been in discussions with Ashley for months, with news of the talks first being disclosed in January. At the time, discussions put a price tag of £350 million on the club.
Ashley, who has owned Newcastle since 2007, has had a tense relationship with the club’s fans, who have shown disdain for what they have perceived as a lack of investment in the squad under his ownership. The founder of the Sports Direct retail chain has flirted with selling Newcastle before, notably in 2018, when he rejected a £250 million cash offer from PCP and said discussions with Ms Staveley had been “a complete waste of time.” But talks resumed and intensified the following year, with Staveley bringing PIF to the negotiating table.
While Ashley is one of Britain’s richest people, with a high street empire that also includes House of Fraser and Evans Cycles, a deal would see Newcastle pass into the portfolio of one of the world’s largest sovereign wealth funds, with around $300 billion assets under management.
Known as the Magpies, Newcastle sat in 13th position in the Premier League when the season was suspended on March 13.