[tommcneill]

Look what little gossip I got was everything was going on on both side then financial hiccup in China spooked negotiations with one side insisting on the money which there entitled to do and the other side being insulted by this behavior as exclusivity had been agreed

Exclusivity just means we would deal with them exclusively and not with any other parties it doesn't mean JP agreed to let them pay over a few years because the Chinese stock market crashed during negotiations.

I couldn't care less if they are insulted, they knew beforehand what the fee was, because they had financial difficulties part way through negotiations and tried to renegotiate the terms just makes it even more apparent that JP didn't think they were good enough to take us over and for that I'm pleased JP didn't go through with it.

[tommcneill]

How do you know there are other buyers interested? Just because peace makes that statement does not make it real.

If there wasn't any other interested parties an exclusivity agreement wouldn't have been needed.

There were other interested parties beforehand it make sense there still would be

[Standaman]

The clubs finances are fully available from Companies House and are relatively transparent. The amortisation policy of any football club can make the cash flow v p&l a bit hard to follow but Albion's accounts really aren't especially opaque.

Valuation is very hard for a club such as Albion. The two most obvious metrics are either P/E ratio or DCF (Discounted Cash Flow) but neither is really appropriate as our profits and cash flows would change so drastically if we were to be relegated. No-one can really pay 10x profits (which is roughly what £150m equates to) as no-one can say with any confidence whether we will be in the Premier League for 10 years.   It is much easier to analyse and club such as Everton as the chance of relegation is much less.

If I were valuing Albion it would be based on the net cash that could be generated after financing.  If you are borrowing £120m out of £150m (Loan to Value circa 80%) , you are risking little of your own money and with potential profits of £25-40m (see my earlier note on potential profits post the new Sky deal), the ROI would be enormous  and also allow for debt to be melted off over 5 years.  I can easily see how £150m is the right sort of price. However, such a deal wouldn't allow for the expansion of wages and transfer fees that supporters would want. I would just run it largely as JP has done but simply take more out as more comes in.

This is pretty much as I see it. The income flows in the Premier League are strong we have a self sustaining model that does not require major investment.

The problem is relegation if that happens we have to go down strong to be able to come back at the moment that would be the case but piling up the sort of leverage suggested would make things very difficult in the Championship and they would only get tougher once the parachute payments expired.

It would be very foolish of any owner to buy the club without seriously considering what happens in the event of relegation and if their business model can not sustain a 50% drop in income initially and an 80% drop once the parachute payments expire they need to rethink.

Frankly I would be appalled to see an 4:1 debt to equity ratio the worst I'd want to see is 1:1 and the resources to plough equity in the event of relegation. As for the notion that the new ownership would be throwing money at the club that was always a pipedream.

[Jimbo Baggy]

I think this clearly proves it wasn’t the Wanda Group, with Mr Wang Jianlin. Think it was a group of Chinese investors. Who's to say the the Americans or Australian parties wont come back for us now. I still think Peace would sell the club if he gets the right owners. Maybe wont be this season but could happen again next summer.

[stoxman]

Frankly I would be appalled to see an 4:1 debt to equity ratio the worst I'd want to see is 1:1 and the resources to plough equity in the event of relegation. As for the notion that the new ownership would be throwing money at the club that was always a pipedream.
[/quote]

As a life long supporter I would agree with you. As an investor I would always go for high LTVs as the payoff is so asymmetric: If  we stay up then the river of cash flow sends my ROI through the roof. If we get relegated then it is the bank manager who has the sleepless nights.  Sadly I suspect their are more financially motivated buyers than angel investors who are willing to gamble their own money...

[leeiswba]

Only problem I see people have is the fact he has made quite a bit of money himself from West Bromwich Albion but as long as we have been successful who cares?

Not as if the money he takes makes a massive difference to whether we finish top 6 or bottom 6

[bangkokbaggie]

Exclusivity just means we would deal with them exclusively and not with any other parties it doesn't mean JP agreed to let them pay over a few years because the Chinese stock market crashed during negotiations.

I couldn't care less if they are insulted, they knew beforehand what the fee was, because they had financial difficulties part way through negotiations and tried to renegotiate the terms just makes it even more apparent that JP didn't think they were good enough to take us over and for that I'm pleased JP didn't go through with it.

I'm not saying you are wrong but you are only speculating as none of us know the facts and as I have mentioned before the other party involved hasn't commented which might contradict what JP has said in his formal announcement.

[halifax_baggie]

I'm not saying you are wrong but you are only speculating as none of us know the facts and as I have mentioned before the other party involved hasn't commented which might contradict what JP has said in his formal announcement.

IF Chinese they would not say anything that would be seen as loss of face

[bangkokbaggie]

IF Chinese they would not say anything that would be seen as loss of face

Don't I know it. Loss of face in this part of the world is a very big thing

[tommcneill]

I'm not saying you are wrong but you are only speculating as none of us know the facts and as I have mentioned before the other party involved hasn't commented which might contradict what JP has said in his formal announcement.

My reply was based upon the reply to me that these people were insulted that the fee was wanted upfront due to the Chinese stock market crash.

Everyone is speculating I know that

[Standaman]

As a life long supporter I would agree with you. As an investor I would always go for high LTVs as the payoff is so asymmetric: If  we stay up then the river of cash flow sends my ROI through the roof. If we get relegated then it is the bank manager who has the sleepless nights.  Sadly I suspect their are more financially motivated buyers than angel investors who are willing to gamble their own money...

Makes perfect sense which is why I was always a little bit wary of the takeover, my hope is still that we end up with a genuinely savvy sports investor who understands the relegation risk (you do wonder if the some of the American investors fully grasped that when buying Fulham for instance) and have a plan for dealing with it. If they can push some of that risk off on to a third party e.g. a bank or bondholders fine but what I do not want is one poor season (which can happen to any club) leading to a financial armageddon which would be near impossible to recover from.

[divinewind]

If this party was given exclusivity then they must have been the best of the bunch. We won't be sold anytime soon.

If it was because they wanted to pay in installments that changed Peace's mind then he wanted the money up front rather than any show of loyalty.
If they had handed him the money there and then, he would have taken it, had that been the case.

Like other's, i don't know the facts and reasons behind the breakdown, but if these were the reasons then to say that Peace is acting in the clubs interests is wide of the mark.

[halifax_baggie]

If this party was given exclusivity then they must have been the best of the bunch. We won't be sold anytime soon.

If it was because they wanted to pay in installments that changed Peace's mind then he wanted the money up front rather than any show of loyalty.
If they had handed him the money there and then, he would have taken it, had that been the case.

Like other's, i don't know the facts and reasons behind the breakdown, but if these were the reasons then to say that Peace is acting in the clubs interests is wide of the mark.

I disagree, if they didn't have the money to buy the club, how could they invest in players for the future?
If they can't do that then Peace acted in the best interests of the club and as the seller himself. the two aspects are absolutely related

[tex]

you only have Peace's side of this, so none of us know what really happened. I doubt there are other buyers waiting, the exclusivity period just gave one buyer who looked serious the chance to do their due diligence. A lot of deals fall apart at this point, especially sports related.

[divinewind]

All i am saying is that if it is true that they wanted to pay in installments, then yes, they couldn't afford to put money into the club.
But don't get fooled into thinking that Jeremy was thinking of us, i think he wanted all the money up front, his, "at this time," statement say's it all for me.

Jeremy loves installments when buying players.

[Baggie79]

All i am saying is that if it is true that they wanted to pay in installments, then yes, they couldn't afford to put money into the club.
But don't get fooled into thinking that Jeremy was thinking of us, i think he wanted all the money up front, his, "at this time," statement say's it all for me.

Jeremy loves installments when buying players.

Basing an opinion on an assumption is never a good idea.

[Hunnington Baggie]

Basing an opinion on an assumption is never a good idea.

we're fans, it's what we do!! 

[Scooby Doo]

It's a shame that it fell through and I hope its rekindled. There's ties there, albeit from years ago but if any foreign investment is to come into the club i'd take even the slightest bit of history over none.

[BAGGIES4LIFE]

All i am saying is that if it is true that they wanted to pay in installments, then yes, they couldn't afford to put money into the club.
But don't get fooled into thinking that Jeremy was thinking of us, i think he wanted all the money up front, his, "at this time," statement say's it all for me.

Jeremy loves installments when buying players.

If they cannot pay up front then we would no better off so I am happy its off for now. Never accept installments on a Capital Gain. If they did not cough up the rest of the money, JP would still have to pay the tax on the whole of the gain.

[BB74]

Any news on this anyone? Gone completely quiet.

[AlbionFan]

Anyone else think that the buy out consortium was headed up by Daniel Levy and it broke down because of the staged payment structure? 

[divinewind]

The events of the past week have made me alter my opinion on Jeremy Peace. The things he does will always divide fans, and to be honest he has me applauding him one week and moaning the next.
But this week he has gone up a long way in my opinion, he won't let our club be held to ransom or give way to cockney spivs.
I dread to think what may have happened if we had just been taken over and someone without his nous had faced the same situation with Spurs.

Let's hope he stay's as our chairman, best one we have ever had. 

[Standaman]

I think people will have to get used to Peace for a little while longer, there was a window for the club to be sold and that window has closed. The Far East infatuation with the Premier League has not gone away but a Chinese consortium with money to burn won't be coming back anytime soon and maybe that was a bullet dodged given what has happened since to the Chinese stock market.

[FallOutBoy]

Any news on this anyone? Gone completely quiet.

I think now the transfer window has closed, Peace may go back out and see what the market is like, probably with a view to selling up next Summer. And I think if a deal is to be done, then with the new TV deal, it'll be done then.

[caravanc58]

with talk of everton being taken over anyone know or heard what the situation is regarding ourselves, are we still up for sale or is jp staying.