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07th Feb 2017

Bill Gates passed up the opportunity to buy Liverpool FC before FSG took over

The revelation follows the release of court documents from the Hicks/Gillett era...

Tony Barrett

Bill Gates passed up the opportunity to buy Liverpool when the club was being sold by Barclays Capital (Barcap) in the final months of the Tom Hicks and George Gillett ownership regime.

The 10th anniversary of Hicks’ and Gillett’s takeover of Liverpool fell on February 6 and court documents pertaining to the sale of the club in October 2010 have revealed that an unsolicited approach was made to Gates, one of the world’s richest men, prior to a deal being struck with current owners Fenway Sports Group (FSG).

The nature of the approach, along with a similar attempt to engage Robert Kraft, the New England Patriots owner, is revealed in legal documents lodged in the USA relating to an ongoing court battle between Mill Financial, a company which tried and failed to buy Liverpool, Gillett and the Royal Bank of Scotland (RBS).

A deposition provided by Sir Martin Broughton, Liverpool’s chairman during the sales process, to the commercial division of the New York County Supreme Court discloses that Gates, the co-founder of Microsoft, was one of a number of wealthy individuals approached during a global search for a buyer.

Asked if he understood that “there was at least an attempt to contact Bill Gates and Bob Kraft in the US?” Broughton replied, “correct.” He then added that the search for a buyer “covered every continent and they were making contacts with people around the world.”

Drew Angerer/Getty Images

Gates failed to respond to the approach as did Kraft, leaving Barcap to continue a trawl which eventually led to three interested parties – FSG (then known as NESV, Meriton and Mill Financial – emerging as the most likely prospective buyers.

Mill has brought the case against Gillett after he failed to pay a $70 million loan back to the financial institution in January 2008 with accompanying legal papers claiming he offered a 50% “membership interest in Liverpool” instead.

RBS are also named as defendants in the case which began more than six years ago, a month after FSG completed their takeover of Liverpool. Up to now, 656 legal documents have been lodged with the court, the last of which was on January 24 this year, with each of them offering an insight into the complex process which culminated in the sale of the club.

As well as the Gates revelation, it is also disclosed that Barcap received two bids from Meriton, a company owned by Peter Lim who went on to buy Valencia, and Mill which both valued Liverpool higher than NESV’s offer of between £285m-300m. Neither bid was considered, though, as an agreement had already been reached with NESV.

Lim ended up purchasing a majority stake in Valencia in 2014 (Photo by Manuel Queimadelos Alonso/Getty Images)

“We received offers from Mill that were above, and from Meriton that were above,” Broughton confirmed. Asked how much consideration had been given to those bids, he replied “None – Because we had already signed a sale agreement”.

“I think there was a discussion, as I recall, because I think we took formal legal advice which confirmed what we kind of knew to be true anyway: that the value, the difference in the value – this would be standard in any merger and acquisition position,” he continued. “Nothing unique to this transaction. But the loss of value to NESV which we would be sued for, for reneging on the contract, would mean the net value of the increase in the new sale would – less the amount of money we would have to pay to NESV for breaking it, was negative.

“My considerations were: (1) it was the higher bid. Not by a huge amount, but it was the higher bid. So, I think you start with the premise that, all other things being equal, you go for the higher bid. (2) was that they had a track record. And so their credibility as a long-term owner of a sports business was stronger than Meriton’s.

“So, if Meriton had been slightly ahead on value, that would have put us in a more complicated position, because you would start with the higher one and then see whether there’s any reason why you should actually reject the higher one for the lower one. But in this case, actually, that secondary piece reinforced the case.

“Third was that it was pretty evident to me at this stage that this would end up in court, likely as not in an American court; and that NESV were far more experienced in American courts than Meriton, and were therefore more likely to understand what they were letting themselves in for, in terms of future court action. Fourthly, that RBS supported the NESV bid.”

NESV completed their takeover of Liverpool on October 15, 2010 having valued the club at around £300 million. Hicks and Gillett subsequently claimed that the deal was “illegal” and had come about as a result of “an extraordinary swindle.”

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