Enic shoots at Premiership goal

Click to follow
News Analysis: BSkyB has a rival in the fight to buy football clubs. Joe Lewis has stakes in four leading teams and is looking for more

WITH ATTENTION focused on Rupert Murdoch and Manchester United, the manoeuvrings of another player on the European soccer scene, the billionaire financier Joe Lewis, have gone largely unnoticed.

Yet within weeks, we can reveal, he will be announcing the acquisitions of another two leading European clubs, including Bordeaux in France and a Swiss club believed to be Sion, the team that supplies most of the Swiss national side.

Through his publicly quoted vehicle Enic he is also deep in negotiations to buy Alan Sugar's 40 per cent stake in Tottenham Hotspur, the North London club. It is believed in the City that if he can raise the money he could still mount a counter-bid for Manchester United, too, although last night's raised offer from BSkyB makes that less likely.

Enic is run by a Lewis protege, Daniel Levy, a 36-year-old Cambridge economics graduate, and by Mr Lewis's son Charlie. Mr Levy, whose family started Mr Byrite, the clothing chain, and had known Mr Lewis for years, approached the Bahamas-based entrepreneur several years ago with the idea of buying up football clubs. They backed into an investment trust called English National Investment Company and set about turning it into a suitable vehicle for their ambitions.

Together they have recruited a formidable array of backers, including SBC Warburg, the City investment bank, and Robert Hersov, who has close ties with both Silvio Berlusconi, the former Italian prime minister, and the French TV group Canal Plus, both owners of football clubs.

Enic also has the backing of Time Warner, the giant US media conglomerate with whom Enic teamed up in April, ostensibly to create a world chain of themed restaurants. Warner's investment made it possible for Mr Levy to fulfil one key element in his strategy of converting Enic from an investment trust to a fully listed company.

Mr Lewis, a publicity-shy man of considerable wealth, has been busily distancing himself from Mr Levy. In April he handed over his 49 per cent shareholding in Enic to Mr Levy and his son Charlie, whose main responsibility is developing the restaurant side of the business. The football side is exclusively Mr Levy's.

Already Enic has made great strides towards achieving its goal - a portfolio of half-a-dozen clubs in Europe, all with huge profit potential in the coming age of the European Super League and digital television.

Mr Lewis's interest in football first emerged nearly two years ago when Enic bought 25 per cent of Glasgow Rangers. Since then he has acquired stakes in three more clubs - Slavia Prague in the Czech Republic, Vicenza of Italy and AEK Athens of Greece.

But the big gap remains England. Enic has been talking to Alan Sugar for over a year about buying his stake in Spurs. Mr Sugar, who owns 40 per cent of Spurs, is holding out for 80p a share. But the real sticking point appears to be Mr Sugar's insistence on his son Daniel remaining managing director.

For the same reason, little has come from one or two other approaches made to Mr Sugar about his stake. But while Mr Sugar has been playing Enic off against other bidders, including Rupert Murdoch, Mr Levy has been playing Mr Sugar off against Manchester United.

This weekend, however, the phoney war became real. Mr Lewis knew he would have to move fast. On Monday, after the Murdoch story broke, Enic was already in the frame. The company put out a holding statement confirming it was "monitoring the situation". But its interest, we have learnt, went far deeper.

One source close the negotiations said: "Manchester United is the jewel in the crown. This is the number one sports franchise. [Enic] is looking at it quite aggressively."

However, as a potential bidder Enic has a huge credibility gap to bridge. Against the might of Rupert Murdoch, it is capitalised at just pounds 123m, a fifth of what the Manchester club will cost BSkyB.

On the other hand, there is a political dimension. There is a good chance the BSkyB bid will be referred for consideration on monopoly grounds, even if ultimately it cannot be blocked. A bid from Enic raises none of the competition issues that a BSkyB takeover of a football club as pivotal as Manchester United inevitably will.

The position of the Football Association which, it has been assumed, would give Enic a dispensation from rules forbidding joint ownership of Scottish and English football clubs, is also in question. The European governing body, Uefa, tried this year to thwart Enic's acquisition plans with a ruling that sought to prevent clubs with common ownership competing in international competitions.

With United's board locked in meetings yesterday and under pressure to make up its mind, Mr Levy flew back from Glasgow where he had attended a Rangers board meeting with the Enic chairman, Howard Stanton.

A bid for United would take some highly imaginative financial structuring, particularly in view of Enic's poor recent share price performance. But Enic has powerful friends who could underwrite such a bid, even if this time Enic may have missed its chance.

Tottenham Hotspur, on current performance, would be more attractive financially. It could be wrapped up for little more than pounds 80m. Indeed there were suggestions yesterday that Mr Sugar had been talking direct to Time Warner. For a man whose instincts are never to overpay, this would probably be Mr Levy's preference.

But price has by no means been the only consideration. The personal animosity of Ted Turner, the head of CNN, towards Mr Murdoch is well known. CNN is now part of Times Warner.

Mr Turner, says a source, is chafing. He feels Warner needs an English football club, and it has to be the best. Getting one across Mr Murdoch would, for Mr Turner, have been the icing on the cake.