A shell company has been registered to facilitate the potential £340m takeover of Newcastle United by Saudi Arabia’s sovereign wealth fund as sources close to the deal claim they are now “90% certain” it will succeed.
It seems the coming week could prove critical as a “tipping point” has been reached, dictating that the next few days will either see the club’s current owner, Mike Ashley, sell up or a takeover first proposed nine months ago founder.
Amanda Staveley, the Dubai based financier serving as a conduit between the Saudis and the Ashley hopes to assume a minority 10% stake in any final agreement and, on 6 January this year, set up PZ Newco Ltd with an address on London’s Park Lane.
The PZ refers to Project Zebra – the codename for the planned Newcastle takeover – and the two listed directors are Staveley and her husband Mehrdad Ghodussi. The fledgling company would be used as a vehicle to transfer shares if any deal is finally completed.
Although due diligence has been completed and advanced talks have been taking place for four months that remains a significant if. Particularly as Ashley has previously said that the leakage of details of any proposed takeover before contracts are exchanged would make it unlikely to happen. In general, major football buy-outs – most notably Abu Dhabi’s of Manchester City – are conducted amid blanket secrecy.
Tellingly Ashley is said to be “unimpressed” by this latest leak which all involved parties acknowledge has placed the transaction in jeopardy. Moreover the retail tycoon described a previous attempted by Staveley to buy Newcastle as a “time-wasting” exercise.
Even so, Ashley is still be negotiating with Saudi Arabia’s Public Investment Fund – Crown Prince Mohammed bin Salman’s investment vehicle – and, although senior figures at Newcastle remain sceptical as to the outcome, Staveley’s camp have made detailed plans for the football operation at Newcastle after an imminent transfer of power. There would though be “no knee jerk” changes with Steve Bruce expected to remain as manager. Perhaps the biggest puzzle is why the Saudis would want to involve Staveley in a consortium also potentially including the billionaire brothers David and Simon Reuben.
It is understood this ostensibly unlikely tie-up reflects an initial approach from Staveley to the Saudis and their subsequent enthusiasm for her holding a minority stake while serving as the public face of the club.
At first glance, the Reubens and the Crown Prince appear unlikely bedfellows but the former held brief preliminary discussions about involvement in Newcastle with Staveley ahead of her previously failed attempt to buy out Ashley and large parts of their extensive property empire are centred on Tyneside.
Moreover, Saudi involvement at the heart of a wider consortium could be seen as part of a PR initiative designed to dampen criticism of the Gulf country’s shocking human rights record, association with extremist Islamic fundamentalism and lack of women’s rights.
Prince Mohamed is keen to reset Saudi Arabia’s global image and the purchase of European sporting institutions fits the country’s Vision 2030 rebranding exercise, which aims to use soft geopolitical power to encourage, among other things, tourism.
Project Zebra’s vision includes not only a £200m investment in Bruce’s squad but the regeneration of run down parts of Newcastle in much the same way that Abu Dhabi’s royal family has invested in areas of east Manchester since its 2008 purchase of Manchester City.
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