Having gone through a period of silence on the takeover front, the past week at Everton has seen reports emerge that two parties remain interested in acquiring the club.
Everton owner Farhad Moshiri moved to reaffirm his commitment to the cause and the club's future back in July after talks between a US consortium featuring real estate tycoon Maciek Kaminski, oil magnate John Thornton and former Manchester United CEO Peter Kenyon ended following the expiry of the exclusivity period.
Kaminski was reported last week to be in 'advanced talks' once more regarding a takeover, although sources on both sides have informed the ECHO that little has 'materially changed' from the position in the summer where interest remained but no headway had been made. Kaminski is now operating without Kenyon and Thornton, and while dialogue is said to have continued over investment in the stadium project, nothing is imminent.
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On Wednesday it was reported by Bloomberg that a special purpose acquisition company (SPAC) fronted by the nephew of famed hedge fund heavyweight George Soros had held preliminary talks over a takeover move. Jeff Soros and Simon Horsman, Los Angeles-based film producers, are the men behind the reported talks, done through their LAMF Global Ventures Corp vehicle. Everton have declined to comment.
Moshiri has been seeking further investment to complete the stadium project at Bramley-Moore Dock, and while conversations with Kaminski are understood to have continued in the background he has also been open to other avenues, with the appreciating value of the dollar against the pound recently likely to embolden some US investors to take a keener interest.
While takeover talk is nothing new the potential for a SPAC to front a bid is curious, with the SPAC sports market having fallen away significantly from the boom that it experienced between mid 2020 and late 2021.
LAMF Global Ventures, which counts former Everton director Keith Harris as a special advisor, raised $253m at its initial public offering (IPO) back in November 2021, with the clock ticking from that date for the SPAC to acquire a target within a defined period, usually 18 to 24 months. The sponsors of the SPAC (the management team that sought investment) included Soros and Horsman's Los Angeles Media Fund, founded in 2012, and the New York-based fund 10X Capital.
After the raising of funds at the IPO, Soros and Horsman said in a joint statement: "We are thrilled by the response to our IPO. We believe investors view our offering as a differentiated SPAC opportunity. The company is comprised of a best-in-class management team that is complemented by an experienced and diversified group of advisors and board of directors.
"Together, and through our expansive network, we intend to identify domestic and international targets to combine with our SPAC within the media, entertainment, sports, e-commerce and technology sectors. We look forward to executing on our stated strategy and anticipate a successful business combination."
The SPAC market boomed during the pandemic. Large sums of capital that trade on the stock market, identifying new start-ups or merging with existing companies and taking them public was a major part of the investment world during COVID.
As Bloomberg explained last month, 'for every $10 someone invests, they get a unit. Then deal sponsors take the pile and typically have two years to find and buy companies. They generally get to keep 20 per cent of the shares for themselves.'
Sports betting SPACs such as DraftKings Inc, performed well, with more than 100 SPACs coming to market, according to research earlier this year from US sports business analysts at Sportico. At present, more than $150bn in capital is at play through more than 500 SPACs and has the timer against them to put it to work.
There are benefits for both the SPAC sponsors and the investors, with the sponsors able to acquire relatively cheap stock, while investor risk is reasonably low, with the capital invested returned if a target is not found, and investors able to claim back the original capital if they do not like a deal.
An Everton takeover by a SPAC would see the club listed publicly at an agreed market price ahead of time, with shares available for purchase in the business.
In 2020, Liverpool owners Fenway Sports Group entered into negotiations with RedBall Acquisition Corp, a SPAC created by RedBird Capital Partners founder and now AC Milan owner Gerry Cardinale and baseball analytics guru and pioneer of 'Moneyball', Billy Beane. The talks centred on a potential 20-25 per cent stake in FSG, but with a valuation not as high as some investors had wanted to see, allied with some reluctance to take FSG public, the RedBall deal was shelved and Cardinale eventually acquired 11 per cent of FSG private through his RedBird firm. RedBall had come close to acquiring the ticketing platform SeatGeek earlier this year but a deal could not get over the line and the RedBall SPAC has now been dissolved.
Speaking on a potential RedBall stake purchase in FSG back in 2020, economist Andrew Zimbalist, a lecturer at Smith College in Boston, Massachusetts, told the ECHO : "How it impacts fandom, I would say it is very positive.
"What it means is fans of the team can have a direct ownership stake in the success of Liverpool. If I'm a Liverpudlian I buy stock in the team and now I have two reasons to support the team, the first one being that I'm a fan and the second being the extent that if Liverpool does well and the price of my stock goes up.
"That can create more avidity and fandom. That is a good thing for the owners but it can be a good thing for the fans also.
"This allows the owners to recapitalise their financial standing and gives them additional money to sign players and could serve as a lever to help strengthen the team."
Interest in the sports industry from SPACs was, according to Zimbalist, largely born from the rise in valuations across the board and them outperforming the stock market.
There are arguments that SPACs are something that are very lucrative for the founders and sponsors but can be less so for the investors seeking returns.
Football teams and the stock market have something of a potted history. At present Manchester United, AS Roma, Lazio, Celtic, Sporting CP, Borussia Dortmund, Juventus, Ajax, Benfica and Porto are publicly listed. In years past, Millwall, Birmingham City and Tottenham Hotspur have all taken the decision to delist from the stock exchange.
The Premier League has attracted huge interest from US investors in recent times, largely due to the perception stateside that English Premier League teams are undervalued when compared to major American sports franchises. The boom in valuations, strong media rights, allied with the strength of the dollar against the pound, has made it fertile ground for further US capital to find its way into Europe's biggest domestic league.
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