Saudi Arabia is reportedly close to extending its presence in the global sports market with a £340m (€403.9m/$444.9m) takeover of English Premier League football club Newcastle United, but a deal could yet be scuppered by its disclosure.
Saudi Arabia’s Public Investment Fund (PIF), the Kingdom’s sovereign wealth fund, is reportedly leading the bid, which is being brokered by Amanda Staveley, the Dubai-based financier who has been tied to previous takeover offers for Newcastle, currently owned by Mike Ashley, the British billionaire behind sportswear retail group Sports Direct.
News of the potential takeover was first reported by the Wall Street Journal on Saturday. The BBC, citing a source familiar with the talks, today (Monday) said negotiations are “advanced”, adding that Ashley has been talking to the PIF for several months.
The Guardian newspaper said a shell company has been registered to aid the takeover, adding sources close to the deal claim they are now “90-per-cent certain” it will succeed. Staveley is said to be seeking a 10 per cent stake in Newcastle should a takeover succeed, and reportedly set up PZ Newco on January 6.
The Guardian said PZ stands for Project Zebra, codename for the takeover, with the two listed directors being Staveley and her husband, Mehrdad Ghodoussi. The company would be utilised as a vehicle to transfer shares if any deal is finally completed.
Project Zebra’s vision for Newcastle is said to include a £200m investment in the squad, but also regeneration of run-down parts of the city, a similar model employed by Abu Dhabi United Group following its 2008 takeover of Manchester City.
However, the PIF takeover could yet be ended by being made public. Ashley is said to be unimpressed by the leak of information, with the Newcastle owner having maintained a stance of frowning upon the disclosure of any potential takeover.
Indeed, Newcastle has been linked to multiple takeover bids since Ashley put the club on the market in October 2017. The latest came in May, when Sheikh Khaled bin Zayed Al Nahyan “agreed terms” on a takeover deal, according to a statement released by a conglomerate of national and international businesses owned by the UAE billionaire.
Ashley has proved a divisive figure among Newcastle supporters due to his stewardship of the club. Prior to the latest news and May’s reports, the last serious takeover interest in Newcastle came in late 2017 and early 2018.
In January 2018, talks collapsed between Ashley and Staveley over the sale of the club. Staveley’s PCP Capital Partners firm had appeared in pole position to purchase the club after submitting a formal bid to do so in November 2017. The bid came a month after Ashley had placed the club up for sale.
A PIF takeover would make Newcastle the second Saudi-owned Premier League club. Sheffield United is owned by Saudi Prince Abdullah bin Mosaad bin Abdulaziz Al Saud, who secured full control from Kevin McCabe last year.