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Liverpool: Even by the standards of the absurd power struggle that has raged at Liverpool Football Club for the past nine months, this week was pretty tumultuous.
A spectacularly successful night in the Champions League at its Anfield home on Tuesday was followed two days later by Tom Hicks, one of its co-owners, sending a three-page letter to chief executive Rick Parry ordering him to resign.
Parry refused, describing the idea as "offensive" and bemoaning "more dirty linen being washed in public".
Then, George Gillett, the other co-owner, hit back at his business partner. "Any decision to remove [Mr Parry] would need the approval of the full Liverpool board," Gillett told the Liverpool Echo. "Rick retains our full support."
Meanwhile, Sameer Al Ansari, chief executive of Dubai International Capital (DIC), which has been stalking the club for some time, gave an interview in which he suggested it had pulled out of buying Liverpool, though DIC insiders have since told the Financial Times it had done no such thing. It is simply waiting in the wings until the Hicks/Gillett battle is settled.
The Liverpool saga has resembled a badly-written soap opera for the whole of its erratic season on the pitch. Hicks and Gillett, the US sports franchise owners, have long since given up talking to each other.
Preferred bidder
Liverpool continued to achieve success during the tail end of the club's 50-year ownership by the Moores family, well known on Merseyside for its Littlewoods pools empire.
But when the family decided to sell, DIC and Al Ansari thought their time had come.
In December 2006, DIC was made preferred bidder. But according to a source, Rabih Khoury, then chief executive of its emerging markets division, appeared unable to close the deal. Khoury left the company "by mutual consent" last month.
Out from the shadows stepped Gillett, owner of the Montreal Canadiens ice-hockey club. Unable to purchase the club single-handedly, he brought into the frame Hicks, co-founder of the investment firm, Hicks, Muse, Tate & Furst, whose Hicks Holdings empire owns the Dallas Stars ice-hockey team and the Texas Rangers baseball team.
They agreed a 50-50 partnership and quickly persuaded the Liverpool board that they were a better prospect than DIC.
The relationship began to fracture around autumn of last year. The problem, according to one insider, was that the long-term planning was non-existent. Their deal was covered by a short-term bridging loan of about £185 million. Their interest in Liverpool, the insider added, had more to do with using the club as collateral against their sports franchise assets in the US. Hicks Holdings denies this.
In January, less than a year after buying the club, the US duo were having to refinance their purchase in a stalled debt market. The £350 million deal they arrived at involved huge personal guarantees equivalent to £90 million apiece. Their Kop Holdings investment vehicle took on £245 million of the refinancing, the remaining £105 million debt falling on the football club.
Servicing the £245 million debt involves an inter-company loan of £60 million paid by the club to Kop Holdings over three years.
According to DIC insiders, the refinancing - which lasts only 18 months - was only agreed by Royal Bank of Scotland and Wachovia, the US bank, because the lenders knew there was a willing buyer waiting in the wings.
Despite his sense of pique back in 2007, after being pipped to the Liverpool deal, Al Ansari never walked away. DIC kept up lines of communication with the co-owners individually. At one point last year, Hicks dangled a 15 per cent stake in front of Amanda Staveley, whose PCP Capital Partners advisory company is fronting DIC's attempt to buy Liverpool.
DIC concluded that the offer amounted to a valuation of the club of £1 billion, and said no.
Gillett appears to have been more genuinely eager to sell, He was willing to sell his stake to DIC in a deal that would see him make £80 million from his original investment. But under a clause in their purchasing deal, neither co-owner can sell his stake without agreement from the other. Hicks told Gillett he could not sell.
DIC, which had made clear it was not interested in partial stakes, now entertained the idea of allowing Hicks to take a small portion of his partner's holding, leaving him with 51 per cent and DIC 49 per cent. But when Hicks insisted on full managerial control, DIC abandoned that idea.
Now, Gillet's response to Hicks calling for Parry's resignation, suggests he and DIC are now more convinced that they are nearing the conclusion of the row.
A source DIC and Gillett have already come to an in-principle agreement about a future transfer of ownership. This means DIC already wields substantial influence over Gillett's interest, another reason for Hicks's ire.
Hicks has been in talks with Merrill Lynch about raising more money with a view to buying out his partner, though Gillett has made clear he will not sell.
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