A SECOND bid today by Gary Hoffman to take over Coventry City offered £1.2million upfront with add-ons for promotions – and was categorically rejected around lunchtime today when we revealed ‘bids’ had been turned down.
Crucially, the second bid still contained no proof of funds, and no transparency over the identity of would-be ‘investors’.
It also once again proposed a ‘debt free’ acquisition of the club – hence, it made no direct proposal to address Sky Blues’ ‘owners’ Sisu’s investors’ liabilities – the tens of millions of pounds pumped into the club in loans.
Former club vice-chairman Mr Hoffman – who has tried and failed before to acquire the club – claimed the second bid was worth a total of around£12million, we can reveal.
But we understand that estimate was categorically dismissed by Sisu – as being based on uncertain scenarios, with other add-ons relating to a cut of any future sale of the club’s current assets – a club with few assets.
The first Hoffman bid last weekend, without the necessary proof of funds, offered an upfront payment of £500,000, which he today upped to the £1.2million figure.
His second offer letter today was responded to swiftly with an outright rejection letter, which again stated his bid was ‘derisory’.
Today’s offer, as with the first, proposed £250,000 to Sisu upon promotion to League One, and £250,00 for staying there the following year.
It offers £500,000 for a promotion to the Championship within five years; and £5million for promotion to the highly lucrative Premier League within seven years, where TV revenues alone dwarf that sum.
Smaller add-ons included for any cup successes within a certain period.
As we reported earlier today, claims that Coventry City ‘takeover talks’ were ‘ongoing’ with Mr Hoffman were dismissed as false by Sisu – after we revealed yesterday his first bid had been rejected.
We published earlier today the following statement by Sisu, which stated Mr Hoffman’s ‘bids’ (plural) had been rejected.
The Sisu statement reads: “Following recent press articles discussing offers for CCFC, SISU would like to confirm and put on record that there are not (nor have there been) any talks or negotiations taking place for the sale of CCFC.
“Indeed, Mr Hoffman himself has noted publicly that the derisory bids put forward by him in recent days were immediately rejected.
“There were no talks prior to receiving the bids, nor are any expected or planned.”
The football club had yesterday released a statement to us saying: “To be clear, the owners have not received any credible offer for the football club.
“The noise and speculation around the football club is simply not helpful.”
Sisu has previously stated it wanted to acquire value for the club, and needed more commercial stadium revenues for the team to be more competitive.
Mr Fisher recently told a fans’ group Sky Blue Trust meeting that a sale of the club was not likely at the bottom of the cycle, or market – with Sisu seeking a return on its investment since taking over the club nine years ago.
The club has claimed Sisu and associated companies including Arvo Master Fund have invested at least £70million in the club, including in inter-company loans and some debts now transferred into shares. There have been some reports that the figure is now above £100million.
It follows speculation two weeks ago that Mr Hoffman and former Sky Blues chairman Joe Elliott had reached an ‘agreement in principle’ accepted by Sisu, a widely circulated rumour that was categorically dismissed as false.
Mr Elliott and Mr Hoffman – the pair who hire a corporate box for home matches at the Wasps owned Ricoh Arena – have failed with various takeover attempts since their departures from Coventry City Football Club’s board.
It is understood Mr Hoffman’s bid claims he is confident of striking agreement to remain in Coventry. Ricoh owners Wasps, £43million in debt from the last annual accounts, take nearly all the stadium revenues since Coventry City Council’s Ricoh sale on a massively extended 250-year lease in 2014, not offered to the football club on which the stadium financially depended.
More than £30million of Wasps’ debt resides in a retail bond scheme. It includes covenant pledges to bondholders that the Ricoh will be revalued every two years. The first revaluation – of the initial valuation of the 250-year lease of £48million based on assumptions of rapid business growth – was due last June, but did not take place, as we revealed.
Mr Elliott fronted a failed would-be attempt by American property investor Preston Haskell IV in 2013. In that year, several takeover attempts, some with the involvement of Coventry City Council, failed via an administration process – amid a multi-party dispute over Ricoh Arena stadium rent, revenues and ownership.
Mr Hoffman fronted another failed takeover attempt in 2011, and later tried and failed with a takeover using Chinese investment.
The club is now relegated to League Two, the fourth tier of English football – and is struggling to make ends meet amid off-field politics and being deprived of commercial revenues from a stadium.
The fans group The Sky Blue Trust and associated groups have campaigned for ‘fans’ or ‘part-fans’ ownership for five years, but have failed in that time to show a credible plan for achieving it.
Support community journalism by making a contribution
The Coventry Observer's team of journalists provide a trusted source of news, sport, entertainment and events going on in your area and issues which matter to you - both via our free weekly print edition and daily updates on our website.
Every contribution, however big or small, you can make will help us continue to do that now and in the future.
Thanks for reading this and the Coventry Observer.