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China Targets Liverpool With $1B Takeover Bid Backed By Country's Government

Liverpool is the target of an £800M ($1.05B) "takeover bid backed by the Chinese government that has the potential to make them the richest club in the Premier League," according to Jonathan Northcroft of the LONDON TIMES. China Everbright, a state-backed financial giant, "is spearheading the attempt to buy the Anfield club from current owners Fenway Sports Group (FSG) but the bulk of the money is expected to come from the China Investment Corporation (CIC), the country’s main sovereign wealth fund," whose assets are put at about £620B ($811B). Should the bid succeed it would give Liverpool backers a financial clout "exceeding even that of Manchester City’s owner, Sheikh Mansour, and open the possibility of transfer spending to match City and Manchester United." One well-placed source cautioned, however, that there is "still plenty work to be done to finalise any deal." Involved with the Chinese bid is Amanda Staveley, the leading Man City dealmaker who helped broker Sheikh Mansour’s £210M purchase of Man City in '08. It is understood talks with representatives for FSG and the Chinese group "are ongoing and that under the current plan Liverpool would be taken over by a new ownership group of which Everbright," potentially Staveley herself, and John Henry, Liverpool’s current principal owner, would be part. Henry "may even retain a majority stake, with the Chinese becoming minority partners" (LONDON TIMES, 8/21). In London, Binham, Massoudi & Ahmed reported FSG "appointed financial advisers after an unsolicited approach by a consortium led by Chinese investment group Everbright and PCP Capital Partners." FSG "has hired Allen & Co, the boutique investment bank, to advise on discussions over the acquisition of a substantial stake in one of England’s most storied football clubs." If a deal is agreed, it would be the "most significant transaction in a long list of investments from China in European football clubs and comes as President Xi Jinping wants to elevate the status of football in China." While the precise size and valuation of any deal under discussion "is unclear, the consortium is understood to be interested in buying a large stake in the club." Liverpool CEO Ian Ayre: "We have no comment. There is no bid and we have no ongoing investment discussion of any kind with anyone." FSG could not immediately be reached for comment. Staveley declined to comment. Allen & Co declined to comment (FINANCIAL TIMES, 8/20).

NO OFFICIAL BID: In Liverpool, James Pearce wrote senior FSG execs "are adamant that they have received no bids and that there are no ongoing discussions about selling a stake in Liverpool." Liverpool Chair Tom Werner said that Liverpool was “not for sale” and FSG insists that remains the case. FSG was said to have hired Allen & Co "to provide advice during negotiations with China Everbright." However, it is understood FSG has "a long term relationship with Allen & Co." The owners insisted "the only discussions they have had recently about potential investment centre around possible sponsorship deals" (LIVERPOOL ECHO, 8/21). REUTERS' Elizabeth Piper reported a source said that there were "no active discussions" involving FSG, and the club had received "no bid." A spokesperson for the British government, which under new PM Theresa May has said it will review a Chinese-backed nuclear energy project, "declined to comment on the report, saying it was a matter for Liverpool's owners" (REUTERS, 8/21). In London, Don Weinland wrote the football and sports rights business "is a far leap from China Everbright’s origins more than three decades ago, but its interest in Liverpool FC should not come as a surprise given the financial conglomerate’s recent focus on tapping into China’s demand for sports entertainment." When unit Everbright Securities in May partnered with a Chinese technology group to buy a 65% stake in MP & Silva, valuing the Italian sports rights company at $1B, the company’s CEO said it would look to harness China’s vast sporting market (FINANCIAL TIMES, 8/21).

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