Everton takeover: Friedkin Group aborts buy-out after failing to reach agreement
Friedkin Group Ends Everton Takeover Talks
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The Friedkin Group was given the sole opportunity to negotiate a takeover.
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Everton and the Friedkin Group have decided to end their discussions about a potential takeover, as they were unable to come to a final agreement.
The Friedkin Group, who also owns the Serie A team Roma, had reached a preliminary agreement to acquire the Premier League team in June.
Chairman Dan Friedkin and his team were given the exclusive rights to negotiate after a potential sale to Miami-based company 777 Partners fell through.
"The Friedkin Group and Blue Heaven Holdings issued a joint statement on Friday, stating that they both believe it is beneficial for Everton to investigate other possibilities."
BBC Sport has learned that the main issue causing delays is a problem with the previous interested party, 777 Partners. Their takeover proposal was supported by funding from financial insurers A-Cap.
The 777 group provided Everton with a loan of £200m while trying to acquire the club. The main concern is not the repayment of the loan, but the legal trouble 777 is facing in the United States.
Friedkin Group was uncertain about the duration of the situation, unsure of the loan's ownership, and cautious about potential risks. Therefore, they chose to leave instead of waiting for the problems to be fixed.
The Friedkin Group gave £200m to the club and cleared a £158m debt to MSP Sports Capital and two local businessmen. They will continue to support the club as a lender, the joint statement on Friday said.
The loan from the Friedkin Group is considered to be a secure one, indicating that the group has no intentions of requesting repayment right away. Sources from the club have confirmed that Everton is not in a risky financial situation.
A group led by ex-LA Dodgers boss Kevin Malone is thinking about reviving their interest in buying Everton, according to BBC Sport.
Similar to the Friedkin Group, the main issue of concern revolves around the debt, which the group of companies is currently working to resolve.
The group put in a bid to take over before the Friedkin Group got the exclusive rights. They were prepared to invest over £78m into football operations for this year.
Farhad Moshiri, who purchased almost half of Everton in 2016, now owns the majority of the club with a 94% ownership stake through Blue Heaven Holdings.
Nevertheless, Moshiri has been receiving increasing negative feedback from fans due to the club's financial losses totaling nearly £400m over the span of four years from 2019 to 2023.
As a result of those defeats, the club was penalized by having eight points deducted for not following the Premier League's rules on making a profit and sustaining financial stability.
Moshiri revealed in September 2023 that an agreement had been reached with 777 Partners for an acquisition, but that was then slowed down as the group faced challenges in fulfilling the Premier League's ownership requirements.
The acquisition deal fell through in June because 777 did not meet the deadline to complete the share purchase agreement.
The Friedkin Group was the fourth organization to receive exclusive rights from Moshiri without finalizing a takeover, following 777, Maciek Kaminski, and MSP Sports Capital.
Everton has officially announced their plans to relocate to a new stadium at Bramley-Moore Dock starting from the 2025-26 season.
Friedkin Thought The Deal Wasn't Worthwhile
Soccer financial specialist Kieran Maguire appeared on BBC Radio 5 Live.
The Friedkin Group was carefully examining Everton's financial situation and had concerns about certain unpaid loans.
They were optimistic that the lenders would agree to lower the amount owed to them. One of the owners of 777 has a complex background.
I believe the Friedkin Group decided that the situation was becoming too complicated and too risky for them.
They were going to receive a large amount of money owed, but if they couldn't make sure that certain lenders wouldn't reduce the amount, they didn't think it was a good idea to proceed with the deal.
Most investors and lenders see Everton as more valuable as a functioning business rather than a club in danger of going bankrupt, as they would lose their control over how the club is run.
We might see the lenders show more dedication because they are worried about losing a lot if the club goes bankrupt, which is the worst possible outcome.
"It's not ideal, but Everton still presents a good opportunity if the club can be purchased at the right price."
On March 24, 2023, the Premier League has sent Everton to an independent commission for investigation regarding potential violations of Financial Fair Play regulations during the three-year accounting period leading up to the 2021-22 season.
On September 15, 2023, Farhad Moshiri decides to sell most of his ownership in the company to the American investment fund 777 Partners.
On November 17, 2023, Everton was given a penalty of losing 10 points by the Premier League because they broke some financial rules. However, after appealing the decision, the deduction was reduced to six points on February 26, 2024.
On March 31, 2024, Everton reported a deficit of £89.1 million for the 2022-23 season.
On April 8, 2024, Everton was penalized two points by the Premier League for a repeat violation of financial regulations.
On May 8, 2024, Moshiri has discussions with 777 Partners in order to get a better understanding of the group's financial status.
On May 10, 2024, reports reveal that 777 Partners has hired financial restructuring specialists amidst increasing concerns about the company's capability to acquire Everton.
May 14, 2024: Moshiri gives 777 Partners more time to finalize the share purchase agreement, now due by the end of May.
On June 1, 2024, 777 Partners misses the deadline for completing the takeover.
June 14, 2024: Friedkin Group reaches agreement in principle to take over the club.
20 June 2024: Moshiri gives sole rights to negotiate with the Friedkin Group.
On July 19, 2024, Friedkin Group and the current owners of Everton revealed that discussions about a potential takeover have come to a close without an agreement being reached.
