‘Leverage buy out’ of the club

[WBA123]

I was reading recently about how the Glazers bought Man Utd using a ‘leveraged buy out’. Effectively, it’s like getting a mortgage on a house. Put a deposit down and borrow the rest. Apart from they put the outstanding debt against the club and have paid only interest on the loans since then (it was actually a clever move by them).

It got me thinking whether we could do that as fans. We as fans could raise 20 or 25% of the value of the club between us. Apparently Lai wants £150m (I’m sure he’d negotiate). If so, we’d need to raise £30m for 20% deposit, which is an average of £1k from 30k fans.

The rest could be borrowed against the club. The problem here would be the interest rate, which would likely be at least 7-8%. So borrowing £120m, we could be paying £10m per year in interest and saddle the club with lots of debt, if we weren’t promoted, but then is that any worse than having Lai dipping his hand into the club coffers and taking out loans against the ground. At least the fans would have control of the club.

Just an idea, are there any finance experts, or people who know someone in that field? Would people on here prefer a fan ownership like this, despite the level of debt that it would incur?

[Albionic68]

You only read about the Glazier's leveraged buyout recently as in you were reading about it recently or you hadn't realised it was a leveraged buyout? Meanwhile MSD who are funding our loan also helped fund the leveraged buyout of Burnley by their current owners and funded loans for Southampton and more worryingly Sunderland and Derby.

[DaveP67 is back!]

Would just add more debt to the club, we want Lai out but have to be careful.

[WBA1955]

Our shareholders used to be fan's in the majority until Peace undervalued the club and bought them out, it made him the biggest shareholder, he set up a holding company whatever that was and sold us for three times our value to a property developer.
He also took a loan on top of the money he got for us.
Peace took the p iss for years calling us a mid table championship club, making the ground smaller, and knocking down the Woodman.
Selling us to Lai was his final joke.

[mickd1961]

I was reading recently about how the Glazers bought Man Utd using a ‘leveraged buy out’. Effectively, it’s like getting a mortgage on a house. Put a deposit down and borrow the rest. Apart from they put the outstanding debt against the club and have paid only interest on the loans since then (it was actually a clever move by them).

It got me thinking whether we could do that as fans. We as fans could raise 20 or 25% of the value of the club between us. Apparently Lai wants £150m (I’m sure he’d negotiate). If so, we’d need to raise £30m for 20% deposit, which is an average of £1k from 30k fans.

The rest could be borrowed against the club. The problem here would be the interest rate, which would likely be at least 7-8%. So borrowing £120m, we could be paying £10m per year in interest and saddle the club with lots of debt, if we weren’t promoted, but then is that any worse than having Lai dipping his hand into the club coffers and taking out loans against the ground. At least the fans would have control of the club.

Just an idea, are there any finance experts, or people who know someone in that field? Would people on here prefer a fan ownership like this, despite the level of debt that it would incur?

I’ve mentioned this idea before 123 but it’s riddled with complexity.

With all of the additional loans taken out by Lai the club is already in a much weaker position and thus harder to lend against assets already lent against.

Also remember, when you buy a business you’re also taking on its present vat liability and its pension liability to employees.

We have no idea what the state of play is on these matters, are we up to date with payments on all of these sorts of things?

I’m wondering how all of this leaves us in terms of Financial Fair Play rules and if we are heading for 10 and 20 point deductions next season if not promoted?

I said two seasons ago that Lai’s best bet was to sell us the minute we got promoted under Bilic, I for saw the future if he didn’t.

He either takes a large financial “hair cut” in selling us quickly or otherwise he drives us into oblivion whilst milking all he can.

I can visualise a failed promotion attempt this season and the same situation by January of 2024 and then a massive fire sale of any half decent players during January and summer 2024 as he rakes in as much as he can before we go bust.

There’s not enough fan action against him, especially now we are winning again.

As for your fan shares idea, it may not take 30,000 people paying £1k each, I’m sure a lot of fans would put more in but how to even get the ball rolling is the question?

Do we appoint someone to try to collate a buy out attempt and open an Escrow type account in which to hold everyone’s share money?

We probably need a buy out specialist to advise and manage the whole thing.

I’m up for listening to anyone on this and getting involved if I can help but I’m not experienced in this field?