Outlook: Fantasy football
Tuesday 15 September 1998
IT'S A FUNNY OLD GAME, soccer, and no more so than now with the frenzy of speculation about who's going to bid for whom. Two parallels immediately spring to mind. The first is with what's happened to the electricity sector, where distributors and generators have followed each other into a legion of overpriced copycat deals.
The second, that of the City at the time of Big Bang, is probably the more exact one. Once one securities firm had been sold to a bank, then all banks had to have one, and virtually all securities firm just had to find a suitable sugar daddy too. In the process, a generation of mainly undeserving partners got rich beyond the dreams of avarice while the banks lost their shirts.
Here are two versions of the game of fantasy football being played out in the City. The first concerns Tottenham Hotspur. Disillusioned with the game after a disastrous start to the season, Alan Sugar let it be known he'd accept 80p a share for his 40 per cent shareholding. To begin with Joe Lewis's Enic low balled him, but last week it finally came up with the readies.
Mr Sugar then turns round and says he's not selling. Post Rupert Murdoch's bid for Manchester United, it's worth a lot more, he insists. This seems unlikely. Tottenham is unheard of outside the UK and on present form wouldn't qualify for the European super league. It used to be said that even if Spurs was no good on the pitch, at least it was strong off it as one of the most profitable clubs around. Alas even this is no longer true. Tottenham will lose money this year.
Mr Sugar already knows the fans don't like him; they've made that only too plain. Now he's in danger of alienating his shareholders too. This is no way to run a public company. Rather than acting as a conduit for the interests of all shareholders, as he should, Mr Sugar is acting as if the club is wholly his to buy and sell. To redeem his stewardship, Mr Sugar needs to come up with a higher offer in double quick time. If alternatively he's decided he doesn't want out after all, he must announce a compelling strategy to rescue the club from its present predicament. Neither eventuality looks very probable as things stand.
With Manchester United, we now have a real, live fantasy takeover bid. Salomon Smith Barney, the investment bank, has announced through the columns of the Sunday Telegraph that it might counter BSkyB, whether on its own behalf or that of a client is not made clear.
The man heading Salomon's approach is Christian Purslow, an upstart corporate financier who came to prominence last year for an utterly shambolic and ultimately fruitless attempt to float Formula One. So is his client Bernie Ecclestone? Apparently not. Who then? Not saying, comes the riposte, but the bid will be debt financed.
Oh really? Any rival would have to pay a minimum pounds 650m, this for a company with minimal earnings. No one in their right mind would attempt leverage in such circumstances.
Still, there must be someone out there, surely. After painstaking and costly research, we have at last unmasked the mystery bidder. It is Micky Mouse as part of a consortium offer with Ernest Saunders.
Hardy, they could have it for a song.
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