Derby’s administrator has written to the three would-be buyers of the club asking them to forward formal offers to purchase, and is hopeful that within the next 10 days discussions could begin about the club coming out of administration.
The removal of the legal threat by Middlesbrough and positive ongoing talks with Wycombe, together with the successful negotiation over existing debts, means, as far as the administrators are concerned, the club is ready to be taken over.
Andrew Hosking from Quantuma told Sky Sports News the ball is now in the buyers’ court to make definite offers.
“Yes, that’s exactly right,” said Hosking. “Well, when I say ‘show us the money’ they’ve already shown us a considerable quantity of funds to go through the data process they have, so we are well aware that they are well-heeled. It now comes down to them to see where they consider the price settles.”
Quantuma have told all three potential bidders they want a response within seven days, at which point one of them will be given exclusivity to proceed.
“I would hope that in 10 days we will not only have settled on that [the preferred bidder status] but we will probably be having a discussion with the EFL (English Football League) on the exit policy, which is good news,” Hosking explained
“We can’t afford to prevaricate, so there is an economic urgency to this. So the reality is we have to set relatively hard deadlines.”
Hosking says there has been a “very positive dialogue” with HMRC over the money – more than £30m – owed to the UK tax authorities, though he says the sheer size of the debt has been a substantial barrier.
Sky Sports News revealed last month Derby’s total debts are in excess of £60m.
“It is fair to say that the HMRC have a very, very, very large preferential debt,” Hosking admitted. “It is the largest debt ever held by any other football club, I believe.
“We have shown them the mechanisms and the likely scenarios and HMRC will not give you a yes or no in that situation, they will always want to see the final documents before they cast their vote.
“But they are reassured… and it’s safe to say they are as benign as they could be, given the high-profile nature of the club.”
Hosking is convinced there are no further barriers to the club being taken over, and he has called on the three interested parties to now present their best and final offers.
He says time is of the essence, adding: “One of the urgencies of this process is you can’t just keep borrowing, borrowing, borrowing because… your ability to get a credible buyer is then remote.
“That’s why we are moving as quickly as we are, because we want to get out of this situation as quickly as possible and return Derby to where it should be.”
Derby have been in administration since September, leading to a total deduction of 21 points.
They currently lie 23rd in the Championship but are just five points from safety, and manager Wayne Rooney has stated his belief his side will avoid relegation.
Significant barriers to takeover have been overcome
Sky Sports News’ Rob Dorsett
Less than three weeks ago, Derby’s doomsday scenario seemed very real. Debts above £60m, legal threats from Middlesbrough and Wycombe potentially worth more than £40m and the EFL threatening to expel the club from the league if they could not prove they had enough cash to finish the season.
Thousands of Derby supporters took to the streets to beg for the survival of their club, fearing the worst. Local MPs raised urgent questions in Parliament, calling for those in power to intervene. “Save Derby County” banners appeared all over the city. The messages were apocalyptic, desperate, the mood very gloomy.
Things look much rosier now and the change in tone from all involved has been dramatic. There are large barriers still to pass over, but the significant blocks to a takeover have been overcome.
Firstly, last week an agreement was thrashed out between former Derby owner Mel Morris and Middlesbrough chairman Steve Gibson to remove a potential £40m legal threat. Derby’s administrator, Andrew Hosking, told me that while he “disagreed with the merits” of Boro’s claim, he had to give Gibson credit for compromising in the final negotiation.
Talks to remove Wycombe’s legal threat are ongoing, but that issue represents a much smaller liability – less than £100,000 I have been told – so will not block any takeover.
Negotiations have been positive and are ongoing with other agencies who are owed money by Derby – both ‘football creditors’, who are given priority, and non-football creditors who are likely to get only a quarter of the money they are owed in any future settlement.
MSD – the American investment firm that Hosking says “acts effectively like a bank” – is guaranteed to get all of its near-£20m loan back, because those loans were secured on the stadium and Derby’s Moor Farm training centre. There have been positive talks about the repayment period, and in fact, MSD has continued to loan Derby money for day-to-day costs while it’s been in administration.
The issue of Pride Park being owned privately by Mel Morris and not the club itself has been addressed. Hosking says whoever buys Derby can now choose – the stadium can be bought for a fixed price or leased from Morris at another fixed price. Another blockage removed from the sale system.
If Hosking is right and a preferred bidder is in place within a week, it is fully expected the EFL will quickly lift its ban on new player registrations. That means Wayne Rooney could start signing out-of-contract players, and he’s already relishing that possibility.
Rooney says he already has a number of experienced pros lined up ready to sign contracts and help with Derby’s late-season push to beat relegation.
The fact we are now talking about Derby possibly signing new players, when just a few days ago the focus was on the club possibly disappearing after 138 years, shows just how much circumstances have changed.
Of course, now the real business starts. One of the three parties interested in buying Derby has to stump up the cash. Without that, the threat of liquidation remains very real.
Former Newcastle owner and billionaire Mike Ashley is competing with the US consortium Carlisle Group and a group of local Derbyshire businesspeople fronted by former Derby chairman Andy Appleby.
The administrators have a legal responsibility to do what’s best for the creditors, so there will be no subjectivity in the decision-making. In effect, the biggest cash bidder will win.
The administrators have been shown proof that all three have the necessary funds to buy the club, but which of them is prepared to actually pay the asking price? Hosking says there now is a single, definite sale price (though he would not tell me what that figure is, for obvious confidentiality reasons).
The EFL will need to be convinced all football creditors have been paid in full and that whoever wishes to take over the club can satisfy its owners’ and directors’ tests.
What unfolds in the next week in private communications between the three possible buyers, the administrators and the EFL will be absolutely key to Derby’s future.
Those negotiations will ultimately decide whether Derby can escape the financial chaos which has threatened the club’s very existence.
Rooney warned by FA after injury admission while at Man Utd
Wayne Rooney says he has been warned by the Football Association (FA) after he revealed he wanted to try to injure an opposition player during Manchester United’s match against Chelsea in April 2006.
The FA had sought observations from Rooney after an interview published earlier this month, in which he admitted to leaving a “hole” in John Terry’s foot after switching his studs to “big, long, metal ones”.
Speaking ahead of Peterborough’s visit to Pride Park in the Championship on Saturday, Rooney said: “I obviously gave my response to the FA. They’ve given me a warning and that’s it, the matter’s been put to bed so we can move on from that.
“It is what it is. The FA… it was obviously reported and they’ve had to look into it. I got a warning. That’s it, it’s done, we move on. The matter’s closed and I’m pleased with that.”
Terry laughed off Rooney’s admission, with the former Chelsea captain writing on Twitter: “Is this when you left your stud in my foot?”