The West Ham United owner, Bjorgolfur Gudmundsson, is to push ahead with the sale of the club next year after being advised that the compensation to be paid to Sheffield United over the Carlos Tevez affair is unlikely to be more than £10m – a fifth of the total which was, at one time, demanded.
Advisers to the Icelandic businessman, whose finances have been devastated by the collapse of his country's economy, claimed yesterday that non-disclosure agreements had been signed with between "five and 10 parties" interested in buying the club.
The agreements fall short of allowing due diligence – which would grant the potential buyers access to the club's books – but interested parties will be given detailed information on West Ham's finances, debts (around £40m) and liabilities, which are expected to include a commitment by Gudmundsson to cover the cost of the Tevez case.
There has been a handful of indicative bids but all have fallen far short of Gudmundsson's valuation of the club, revealed in court documents filed in Iceland by his holding company, Hansa, which has gone into voluntary liquidation, to be £250m. A more realistic figure is thought to be £150m.
The 67-year-old is now in talks with the Icelandic government and banks about how he can restructure his assets, including West Ham, of which he is the sole owner. There have been suggestions he has been told to sell the club by March, but these have been denied by his advisers, who maintain he cannot be forced into such a move.
Gudmundsson's business empire has been devastated by recent events. Landsbanki, the Icelandic bank in which he was the biggest shareholder, went into receivership in October. Then Samson Holdings, the holding company for shares in Landsbanki, filed for bankruptcy last month. West Ham's then shirt sponsor, the travel company XL, had gone bust a month earlier and it later emerged that Gudmundsson had been the guarantor of a £163m loan given to the company.
This has all taken place with West Ham facing the prospect of paying heavy compensation for fielding Tevez during the 2006-07 season and later admitting that there were "irregularities" in the striker's ownership by private investors.
West Ham were fined £5.5m by the Premier League in 2007 but since then have had to fight potentially more damaging action from Sheffield United over the cost of the club being relegated.
Both parties are due to meet an arbitration panel in March next year but it now appears that, with discussions already under way on the amount of compensation, they are moving towards an out-of-court settlement.
United originally claimed £30m, then increased that figure to £42m, then £50m, but are understood to have since revised it down to £25m. West Ham, meanwhile, have maintained that United have failed to factor in the costs of being a Premier League club and that they were simply calculating on the basis of banking the full amount of television and other revenues for being in the top flight. The true value of losses suffered by United is somewhere between £5m and £10m, West Ham say.
If that proves accurate it would ease the pressure somewhat on a sale and make potential owners far less nervous about the future of the club, although West Ham could also benefit from pulling further away from the relegation places.Reuse content