The proposed purchase of Farhad Moshiri’s 94.1% share in Everton FC by 777 Partners is ‘well underway,’ according to the Liverpool Echo.
777 Partners were said to have visited Everton’s offices in the Royal Liver Building a fortnight before the takeover agreement was announced and had access to what is known as the ‘data room,’ where 777 executives and their lawyers were allowed to pore over all the information they needed before completing the purchase.
Daniel Geey, a sports lawyer and author who has assisted on multiple takeovers in his career, outlined the process in his book “Done Deal.”
“Once a non-disclosure agreement is signed, the buyer will want to understand the true commercial position and will request a great deal of information,” he said. This is known as the due diligence period.
“Information may include player and staff contracts, commercial contracts, bank loans, overdrafts, and other debts, the company structure and ownership, property documents for the stadium, training ground, and other land the club owns or leases, disputes with other companies, obligations to previous players and staff, and current tax liabilities.”
“This could only be the tip of the iceberg.” In many circumstances, it is more efficient to establish up a data room where clubs can submit all needed papers to a safe site for the lawyers and accountants to review. There can be thousands of documents to review at times.
“Depending on the appetite of the buyer to investigate and understand every aspect of the club’s business, the review can be finalised quickly, in a matter of weeks (or less), or it may take a number of months…”
“Typically, the selling club will communicate with the relevant league to inform them that a takeover is possible.” As the process and negotiations between buyer and seller progress, the Premier League will request a meeting with any possible owners, as well as details about their investment, a business plan, and assurances regarding the sources of their cash. The Premier League may also hire investigative teams to conduct background checks on prospective owners to guarantee that they have “no skeletons in their closets.”
“A completion date is agreed upon after the share purchase agreement (SPA) and a number of additional documents (primarily relating to share transfers and company board resolutions) have been finalized.”
“Occasionally, the SPA is signed and an agreement is reached to close the deal in a short period of time.” Money is normally delivered to the sellers, share certificates are transferred to the buyers, and the buyer and seller agree to finalize the various remaining documentation.”
Assuming the procedure is completed and 777 Partners clears all regulatory and fiscal hurdles, the acquisition may be finalized in as little as 12 weeks (beginning in early September).
777 Partners has already loaned the club around £20 million, and it is understood that 777 Partners will continue to work with the club’s other creditors (MSP Sports Capital, Right & Media Funding) to ensure that operating costs are met, avoiding the need to cash in on high-value players like Pickford, Onana, or Branthwaite during the January transfer window.
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