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Latest update given on proposed takeovers at Everton, Reading and Southend – 7th June

We take a look at the latest update given on proposed and much needed takeovers at Everton, Reading and Southend.

We begin with Everton, with headlines emerging on Friday (7 June) that five groups are trying to buy Toffees as owner Farhad Moshiri considers the next move following the collapse of the planned takeover from 777 Partners.

Farhad Moshiri was tied into a period of exclusivity with the troubled US investment group until the 31st of May, but the deadline passed, leaving the club to ‘assess options’ with administration a possibility in the future.

The following include the potential new Everton owners…

A-Cap are an investment firm who provided funds to support 777 during their pursuit of Premier League approval. The firm are seeking additional investment opportunities in collaboration with Moshiri.

In addition, two local entrepreneurs, Andy Bell and George Downing, have also put forward their interest in acquiring ownership of the Merseyside outfit.

MSP, who are creditors of Everton due to their loan for the Bramley Moore Dock stadium project, are looking to increase their stake in the club, potentially in partnership with other investors.

John Textor, a co-owner of Crystal Palace, has been considered as a potential buyer for Everton. However, in order to proceed with the potential move to Everton, reports state he must first sell his investment in the London club. Textor, a tech entrepreneur, acquired a stake in Palace for £90m in 2021 and has a multi-club network called Eagle Football, including Lyon in France, Botafogo in Brazil, and RWD Molenbeek in Belgium. Despite his involvement with Palace, Textor previously revealed that his current situation at the club doesn’t align with their long-term objectives, and has enlisted the services of Raine Group to assist in finding a buyer for his stake.

In a statement to the Financial Times, he said: “Crystal Palace is an independent club. An integrated sporting model, such as ours at Eagle, is simply not a perfect fit.”

There is also a yet unnamed group ready to show its hand, US-based, with a large financial backing.

Now Reading, and they has initiated discussions with new potential buyers after failing to reach an agreement with their preferred bidder.

In March, fans were delighted but cautious when owner Dai Yongge committed to a letter of intent with an undisclosed party, which granted them a period of exclusivity.

But, this exclusivity period expired on the 22nd of May, as per BBC Radio Berkshire and now the club have said they are engaging in talks with both new potential suitors and the previous exclusive party.

Reading state that Dai intends to finalise the sale as soon as possible.

The club said in a statement: “Reading Football Club would like to provide the following update regarding the club’s sale process.

“On 26th March the Club announced it had entered into a letter of intent with a potential purchaser. This exclusivity period has now expired but dialogue remains open with this group, as well as new bidders, with the aim of completing a sale at the earliest opportunity.

“Mr Dai remains committed to the complete sale of Reading Football Club and its associated assets. The Club appreciates the patience from our staff and supporters through this protracted process, and aim to communicate substantive developments when appropriate.”

Sell Before We Dai have said: “Naturally, we are disappointed that the exclusivity period has ended without a sale.

“Being optimistic, we are relieved the club’s update states Dai Yongge remains committed to selling the club in its entirety and that interested parties – including the one granted exclusivity – remain in negotiations.

“Being less optimistic, this is a situation we have been in before. We are also seeing clubs around us being sold with apparently minimal fuss, which raises the most important question: why is Reading Football Club so hard to sell?

“The answer is that years of unsustainable ownership have left the club with eye-watering operational losses, meaning any new owner has to inject significant funds immediately just to keep the club afloat. Despite Reading’s obvious potential, there are not many owners willing or able to meet both the valuation of the club and its immediate running costs. For those that can, there are plenty of Championship clubs to choose from, as well as top-tier clubs in Europe.

“We know Dai Yongge wants to recoup as much of his losses as possible, but if he does not help fund the club, he won’t have a club to sell.

“Sell Before We Dai, STAR and Reading fans everywhere have shown we can and will rigorously block any attempt to strip the club of its assets, which leaves Dai Yongge with three options:

– Fund the club Sell the club
– Enter administration and lose the club for nothing
– To renege on his promise to fund the club during the sale period is both dishonourable and damaging to a deal.

“Firstly, it is a betrayal of hardworking staff who are working tirelessly to save the club. Their professional and emotional investment is being repaid with insecurity. They worry about being paid for the job they’re doing today, they worry whether their jobs will exist tomorrow. It is an appalling way to treat people.

“Secondly, failure to meet Reading’s obligations puts us at risk of more points deductions. Aside from being another betrayal, this time of our manager, players and fans who gave everything to the club last season, it also makes the club less attractive to buyers. The higher up the leagues we are, the more attractive we are. Surely Dai Yongge is fed up with scoring such spectacular own goals?

“Lastly, we are encouraged by the statement’s commitment to further communication, which has been sorely lacking throughout. We remind those involved that anxiety and speculation thrive in silence. Reading fans are not after full disclosure – we understand the need for discretion in transactions like this – but we do demand respect. Our supporters went above and beyond last season and there is a growing number of fans reluctant to go again while so much uncertainty remains. They deserve better.

“To assist the club with its communication efforts, we are happy to extend an open invite to Nigel Howe to appear on Elm Park Royals or The Tilehurst End podcast to explain the sale process in more detail.

“To our fans, we say keep the faith – it’s in everyone’s best interests to secure a deal. To any potential owners, we say ‘come and get us’ – there is a great club here ready to rise again with our loyal and passionate fanbase behind you. To our current owners, the message stays the same: pay the staff, pay the taxman, sell the club.”

And now on Southend, who could go out of business later this month with prospective buyers expressing “urgent” concerns about their protracted takeover attempts.

A statement read: “By way of background, before COSU agreed terms to purchase Southend United in October 2023, we sought and received assurances from the Council that they were supportive of our proposal to remain at Roots Hall.

“This required an amendment of the prior agreement between the Martins and the Council over Fossetts Farm and Roots Hall.

“By removing the new stadium requirement and releasing the associated land for additional property units, it was agreed that funds from development profits could be paid back to the Club for the sole use of refurbishing Roots Hall and the new training ground.

“All parties committed to doing their due diligence at speed with an initial target for a November 2023 completion.

“As is well documented, the Council‘s estimated due diligence timelines have been consistently revised and consistently missed, but each time we have received assurance across parties that they remained committed to the deal.

“Last Friday, it became apparent that the Council did not wish to progress with the property deal along the terms previously agreed with the Martins.

“As a result, there has been a round of renegotiation this week with both sides assuring us they intend to find a compromise.

“COSU is not directly involved in these negotiations though we continue to stress the urgency of the situation to all.

“Even if a compromise is reached, it seems certain that the revised property contract will not be signed prior to the 26th of June winding up hearing for the Club in the High Court.

“Signing the amended property contract remains the last condition for the completion of the Club’s sale and COSU cannot see a path forward without it.

“For COSU to continue funding the Club and complete the takeover, including reaching payment agreements with the creditors on the winding up petition, we have communicated to the Council and the Martins that we require the following three things:

“1. A revised set of terms for the property contract that all parties are committed to closing.

“2. An updated scope and realistic timeline for the remaining council due diligence work.

“3. An agreement with the Martins to provide security for the further funds COSU will need to inject prior to the takeover.

“We see no reason why these criteria cannot be met next week if all parties act reasonably and with focus.

“If we reach an agreement, COSU will work with creditors and the league to lift the embargo and release season tickets.

“While the situation is outside of our control, COSU wants to assure Southend fans that we are doing as much as possible to prepare for the new season in parallel so that if the deal does complete, we will hit the ground running.

“COSU (Custodians of Southend United)”

Now another protest is planned, with the Southend Fan Protest Group saying: “TOMORROW (SAT 8TH JUNE), BENFLEET ROAD

“In light of recent public and private updates from both the council and COSU we have been in continual discourse with the supporters groups re fan action to save the club.

“It is our view that now is the opportune moment to strike whilst the iron is hot. It is evident that whilst council timelines have been infamously unrealistic, we are only in this position of due diligence as a consequent of the Martins attempting to renegotiate a better deal for themselves.

“We say ENOUGH.

“Our demands are simple:
1. Immediately accept whatever amendments have been put forward by the council.
2. ⁠Provide tangible security for the 50% of club funding you so proudly guaranteed COSU on BBC Essex, such that they can fund the club this month.

“*Tomorrow 9am Benfleet Road*

“Further protests over the coming weeks, in Benfleet, Camden and Leigh will be announced.
Protests will not cease until these demands have been met regardless of any attempts at pressure or persuasion from any outside stakeholder.”

Council leader Daniel Cowan issued a new update on the Fossetts Farm project: “I welcome the statement from COSU today, and I thank them for their candour and patience.

“It has been less than 3 weeks since I became Leader of the Council, and progressing the Fossetts Farm housing proposal has been my main focus in that time. Prior to our new administration forming, we were not properly informed of the details of the proposal by the last administration and as the due diligence has progressed since the 21st May, details have emerged that put the proposals in a completely new context.

“Some of these details have demonstrated that negotiations had and assurances given by the previous administration fell outside of normal practice and were simply not achievable. The changes made by the previous cabinet against best advice (increasing the number of flats in Zone A and reducing the affordable housing rate to 13%) augmented the risk to the council exponentially and created significant exposure.

“The deal agreed in 2020 that included a new stadium was already on the brink of viability and the specifications revised by the last administration made this a non-starter, as due diligence has shown and it was unlikely to achieve planning permission owing to the green belt element of the site.

“When it became abundantly clear that this was unlikely to be resolved or that market conditions would improve sufficiently to reduce our risk to a tolerable level, I immediately moved to a new proposal that the developer is modelling and we hope to review soon.

“I have been clear from the start that my number one priority as Leader of the Council is to protect public finances and safeguard the council from judicial review. This is also the best way to support the club as financial viability and the ability to secure planning permission is vital to the deal and for the club’s future.

“This administration remains committed to meeting the requirements COSU has set out. We are committed to agreeing new terms on a proposal that can actually be delivered and I will ensure that we have a realistic and deliverable timeline for the next stages.

“COSU’s third requirement is a matter for the Martins and COSU but I am in full support of this demand.
We will be working hard to revise the proposals and to put something forward that:

• Is financially viable

• Does not put public money at undue risk

• Can make it through planning

• Gives COSU and the club the confidence they need to start preparing for next season

“I will provide another update as soon as I can.”

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