West Ham suitors meet lending banks in ownership talks today

Posted Monday, January 11, 2010 by theguardian.com

West Ham suitors meet lending banks in ownership talks today
West Ham United may have new owners as soon as next week, with the club keen to capitalise on the January transfer window. Photograph: Action Images

The ownership saga at West Ham United is expected to become clearer after today, when representatives of the consortium of five banks that have loaned money to the Premier League club meet prospective buyers to establish their credentials.

David Sullivan and David Gold, the former Birmingham City owners, and associates of the Malaysian businessman Tony Fernandes are due to hold talks with Rothschild, the investment bank that was appointed in October to sound out potential investors, together with representatives from Glitnir, Standard Bank, Lloyds, Royal Bank of Scotland and Straumur, West Ham's five main lenders.

Although the Canary Wharf-based Intermarket Group and an unnamed North American have also been strongly linked with a takeover approach, there is no indication that either will be present today, when the interested parties will make presentations and outline their plans to support their submitted bids.

It is understood that Fernandes, who is a lifelong West Ham supporter, will be absent because he is not due in England until tomorrow, although his representatives will hold talks on his behalf this morning. Sullivan and Gold are both expected to meet the banks and are known to favour an agreement that would see them buy a 50%stake in the club, effectively becoming strategic partners but, crucially, having ultimate control when it comes to decision-making.

The involvement of the banks in the takeover process is crucial. Through the club's banking covenants they have the power of veto of any change of ownership, highlighting the significance of today's events. Should either or both of the parties be approved, the next stage of the process is likely to involve further talks with Straumur, in their capacity as the largest shareholder in CB Holdings, the company set up by the creditors of West Ham's former owner Bjorgolfur Gudmundsson.

CB holdings have said there is no pressure to sell, although West Ham supporters might argue otherwise. The club is languishing in the lower reaches of the Premier League, only above the relegation zone because of a superior goal difference, and face the prospect of losing rather than signing star players under the current regime. Scott Parker and Matthew Upson are both expected to attract bids from rival Premier League clubs this month.

Should either Fernandes or Sullivan and Gold be successful, it is possible they could be in place as early as next week, with the speed at which things can happen regarded as crucial because of the January transfer window. For that to happen, however, Straumur would almost certainly need to reduce their asking price, with the Icelandic investment bank believed to value the club at around £100m.