Informative article on the 5 stages of a takeover based on a book called Done Deal, written by sports lawyer Daniel Geey, which discusses the process of changing ownership and details the various hurdles that clubs have to go through.
1 The early stages of a takeover - due diligence and the Non Disclosure Agreement
An NDA is a confidentiality agreement so that “information passed between both parties remains private” – it includes things like financials, contracts, disputes the club is involved in and liabilities. Breaching this could mean the bidder being sued.
The NDA “may also include a period of exclusive negotiation” so that no other buyer can speak to the club and sometimes bidders pay for this privilege but exclusivity remains up for debate.
2 The heads of terms
Geey reports that during the beginning of the due diligence process “it is also common to draw up a short two to three page document setting out the important elements of the deal so that both parties understand what is on the table”.
This is called the Heads of Terms – and includes details on the identified buyers and sellers, the purchase price, period of negotiation exclusivity (if it exists), bonuses for the club remaining in the Premier League or achieving certain things (if they’re part of the deal), confidentiality clauses and a timeline to complete the deal.
3 The Sales Purchase Agreement
The heads of terms is one thing but the Sales Purchase Agreement, which takes the bid to the next level, is the important document.
Geey reports that the SPA is the “actual agreement that transfers the shares of the seller to the buyer”. It can be a “mammoth document”, he writes – containing hundreds of pages of clauses, provisions and conditions. It can take months to complete, he suggests – with purchase price and how it is structured the key aspect
4 Premier League notification
A new rule introduced in 2009 stated that the Premier League must be informed 10 working days before the takeover is completed.
According to Geey “in practice, in the build-up to the takeover confidential talks will almost always take place between the potential new owner and the Premier League to ensure everything is in order”.
5 The Owners and Directors Test
The Owners and Directors Test is intended to limit the ownership of football clubs and prevent anyone who has been found guilty of certain offences or have overseen an insolvent or bankrupt company from taking over a club.
https://www.lancs.live/sport/footbal...rnell-19325893
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