The successful group of the two bidding to take control at Newcastle United will end Sports Direct’s association with the club completely for a price that will eventually rise to £300m.
Mike Ashley surprised the two parties who have signed non-disclosure agreements - one of which is led by former Manchester United chief executive Peter Kenyon - by going public on Monday evening because of his desire to get a sale completed by the end of this year.
He is believed to do have done so because he wants to avoid being in control at St James’ Park for the January transfer window and also to ensure both groups have sufficient funds to complete a deal.
Both groups have signed NDAs and Ashley, perhaps for the first time, is eager to conclude a deal quickly and end a turbulent eleven-and-a-half years in charge at St James’ Park.
However, as of Tuesday, neither side had gained exclusivity to go through the club’s books because they had still to give the required guarantees to Ashley that they could complete the deal with the necessary funds.
Ashley said on Monday that he thought it was ‘possible’ a change of ownership could be concluded by the end of this month.
The Newcastle owner completed the deal to buy the club in 2007 in a matter of days and was never present at talks.
“I'd like it (the deal) to be before the January transfer window,” he said. “It’s possible.”
That was largely met with cynicism in the north east. Even the Magpie Group, a set of Newcastle supporters who have led an orchestrated campaign since the summer to oust the Sports Direct owner, doubted the sincerity of the announcement.
“We’ll believe it when we see it,” said Wallace Wilson, the group’s chairman.
However, unlike the lengthy alleged pursuit of ownership 12 months ago by Amanda Staveley that frustrated Ashley so much he called off talks with her, this time those inside the club are currently preparing for a takeover and a change of ownership.
Ashley paid £134m to buy Newcastle from the Shepherd and Hall family in 2007. He had made £929m on the flotation of his Sports Direct business at the start of that year, which he had created from a £10,000 loan from his parents.
He insisted he bought the club to have fun, but his relationship turned when he undermined the manager Kevin Keegan to such an extent that he was successfully sued for constructive dismissal in 2009 by Keegan after an independent arbitration panel.
The nature of his relationship with Newcastle United changed then, and St James’ Park was increasingly used as a venue to showcase Sports Direct.
There are currently in excess of 160 advertising hoardings for the sports shop inside the stadium and there were concerns Ashley would look to extend certain commercial rights, even after he had sold the club, as he had done with Glasgow Rangers, after purchasing a nine per cent stake there in 2014.
However, there is a desire on all sides to ensure that the sale will be a clean break between Newcastle United and Sports Direct, if a purchase can be concluded.
As of 30 June 2017, Newcastle owed Ashley £144m in interest free loans. It is thought this was reduced in the summer of 2018, although the amount is unknown.
A sale price that will rise to £300m will give Ashley a small profit for his tumultuous time in charge at St James' Park.
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