Morgan's move may lead to change of direction at Anfield

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The Independent Online

Steve Morgan, a multi-millionaire Jersey-based property developer, is preparing to invest £50m in Liverpool to help fund a new stadium and buy new players. Though his cash injection would not be sufficient to buy control of the club, it might herald a change of direction in the way the club is run.

Steve Morgan, a multi-millionaire Jersey-based property developer, is preparing to invest £50m in Liverpool to help fund a new stadium and buy new players. Though his cash injection would not be sufficient to buy control of the club, it might herald a change of direction in the way the club is run.

Morgan, 51, is already the club's third-largest shareholder, owning five per cent of Liverpool, but has long held ambitions to be a more influential figure at Anfield. At the club's annual general meeting in January he was critical of David Moores, Liverpool's chairman and largest shareholder, who owns 51 per cent of the club. Morgan feels that Moores, who is a staunch ally of Liverpool's manager, Gérard Houllier, has not been running the club as effectively as it could be run.

Morgan's public criticism prompted Moores, whose family has owned a controlling stake in Liverpool for 50 years, to agree to further talks with Morgan. "It is time to bury the hatchet," Moores said at the time. "If you want a meeting, we will sit down and talk it over."

Morgan and Moores have never seen eye to eye over the future of the club, with Moores consistently rebutting previous requests from Morgan for more control. With Liverpool being a privately owned company, consisting of 42,000 shares worth £4,000 each, the only way Morgan can significantly increase his stake is either through the private purchase of other individuals' shares (which is hard to arrange) or by waiting for a new share issue.

Granada, the second-largest shareholder, with 9.9 per cent, might sell at some stage that but does not seem imminent.

Liverpool, in need of money to fund their proposed new Stanley Park stadium, are considering a share issue. The club appointed financial advisors on Friday to explore the possibility.

The issue would be open to any interested parties but if Morgan underwrote the whole thing and Moores agreed not to buy any new shares, Morgan could end up increasing his holding to between 15 and 20 per cent while Moores' share would fall to around 38 per cent. This would still leave Moores wielding the most power but Morgan would become an influential voice with a seat on the board.

The advantage to Liverpool of the share issue is that they would not need to borrow so heavily to fund the stadium. Morgan, who amassed most of his £300m fortune through his former stake in Redrow Homes, can easily afford to spend £50m and is willing to do so. A spokesman for Morgan said yesterday: "He hopes to make a statement within the next 24 hours."

Liverpool declined to comment last night but a source close to the board said Morgan is seeking representation for his money. "It is not a takeover bid," the source said. "Steve wants to put his money into the club, not the chairman's pocket, by buying shares. To do that, a share issue seems the only way."

At January's AGM, Morgan was particularly critical of Liverpool's proposed financial arrangements for the new stadium, which has yet to receive planning permission.

He would prefer that the club accepted his money rather than be burdened by long-term debts that would detract from investment on the pitch.

It is not known if Morgan has any desire to see Houllier removed from his post but he believes Liverpool should be regular participants in the Champions' League. It is thought Morgan has been disappointed by some of Houllier's buys, not least in the summer of 2002, when some £19m was spent on El Hadji Diouf, Bruno Cheyrou and Salif Diao alone.

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