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Sale of club foiled by Madoff


OzzieMandias
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Or so it sez here:

 

Mike Ashley's attempt to offload Newcastle United was foiled by the allegedly fraudulent activities of Bernard Madoff, the hedge fund manager currently under house arrest while the US authorities investigate suspicions that he masterminded a £32bn fraud. Two wealthy Americans had indicated their intention to lodge a formal offer for the club with the broker Keith Harris, whose Seymour Pierce company had been engaged by Ashley to find a buyer.

 

The bid was expected last month but never materialised. Harris learned later that the two investors had been exposed to Madoff's suspected pyramid scheme at a cumulative cost of more than $300m (£201m).

 

That astonishing loss instantly put an end to their interest in Newcastle. "A few weeks ago there was a decent degree of positive thought and optimism that there would be a buyer and then, amongst others, Mr Madoff came along," said Harris. "There were two people that were looking at Newcastle with us who lost, let's say, over $300m to Madoff."

 

That sum equates to close to the asking price Ashley had set for Newcastle. "Mike Ashley put his hand in his own pocket and paid off all the debt," Harris said. "What you were acquiring would have meant not looking at having to worry about what do I do when the banks we want their money back."

 

Instead, the Americans now have other, more pressing worries.

 

http://www.guardian.co.uk/football/2009/jan/13/digger-newcastle-united-sale-hedge-fund-fraud-madhoff-arsenal-shares-kevin-pietersen-ipl

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If it's true, we've dodged a bullet. Better to have Ashley than two morons who could lose that much money to a scam. At least when Ashley didn't do due diligence, he still got a football club out of it.

 

Ashley probably thought he luckily stumbled onto one of the best deals of his business career, and he isn't one to scour over the books where his business acquirements are concerned and i've posted the link in relation to this in another thread. A club with arguably 3rd biggest supporter base in the country, and a matching 50000+ seater stadium for less than 200m.

 

He and his mouthpieces just duly whinged about acquiring what was predominantly managed debt ie. stadium related debt.

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