Everton are on the verge of announcing that a new group has entered into exclusive negotiations with owner Farhad Moshiri over a takeover of the Premier League club.
Details are being closely guarded but existing creditors Andy Bell and George Downing have been trying to pull a deal together with the support of British financial services group Zeus Capital and U.S. private equity firm BDT & MSD Partners.
But there is also advanced interest from a global consortium of wealthy investors.
It is still unclear which option Moshiri favours but an announcement is believed to be imminent.
While the deal would be subject to regulatory approval, the news will come as a huge relief to the club’s supporters after a prospective takeover by 777 Partners fell through last week.
Moshiri agreed a deal to sell his 94.1 per cent stake in the club to the Miami-based investment firm last September but the takeover was conditional on 777 clearing several hurdles set by the Premier League, most notably paying off a £158million ($202m) loan made to Everton by MSP Sports Capital, another American investment firm.
Despite lending Everton almost £200m ($255m) over a nine-month period, 777 was unable to find the money to settle the MSP debt and is now on the verge of bankruptcy itself amid several lawsuits over unpaid bills, disputed loans and claims of fraud.
But with 777 finally out of the picture, Moshiri has been able to speak to other interested parties about selling his majority stake again and those talks have developed quickly.
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For example, there has been talks with John Textor, the founder of Eagle Football, the group that owns Brazilian side Botafogo, French team Lyon, Belgium’s Molenbeek and 45 per cent of Crystal Palace.
Speaking to The Athletic last month, the American investor said he had spoken to Moshiri’s advisors, Everton’s main creditors and potential lenders, but admitted he would not be able to move for the Merseyside club until he had found a buyer for his stake in Palace, as the Premier League would not allow the same person or group to have such a large say at two of its member clubs.
Textor had expressed an interest in buying Everton (Xavier Laine/Getty Images)
One of the ideas Textor discussed with Moshiri’s camp was asking the Premier League to put his Palace stake in a blind trust so that he could proceed with a bid for Everton, while his advisors continued to market his Palace shares.
But that idea was quickly ruled out as impractical and no such request to the league was made. Textor, therefore, is unlikely to be able to buy Everton.
His dalliance with the club, however, proved that credible potential owners can raise the required money to take control at Everton, providing deals can be done with the creditors.
As well as the near £200m debt to 777, Everton owe Cheshire-based lender Rights and Media Funding (RMF) £225m ($287m) and another £158m ($202m) to MSP. RMF’s debt is secured against the club’s assets, while MSP’s collateral is club subsidiary that owns Everton’s new stadium at Bramley-Moore Dock.
777’s loans are secured against club assets but they are behind RMF in the repayment queue, and Moshiri is owed £450m ($575m) in shareholder loans but has little chance of getting that amount back as the loans are unsecured and should be treated as equity.
The most likely solution for any new owner would be to join some or all of the MSP group of investors, which includes British businessmen Bell and Downing, in taking control or paying them off entirely and taking their secured position on the new stadium.
Everton plan to move into Bramley Moore for the start of the 2025-26 season (Paul Ellis/AFP via Getty Images)
Bell has recently set up a new company called Toffee Ventures, named after the club’s nickname, and has recently sold £28m ($35.8m) worth of shares in AJ Bell, the successful investment platform he set up in 1995.
RMF is believed to be willing to extend the rolling credit facilities it has given Everton, as a sizeable chunk of its loans are secured against instalments of transfer fees owed to the club, including future sales, so Everton’s debt to RMF is already scheduled to fall.
Moshiri’s debt would need to be effectively wiped out or converted to equity. The Anglo-Iranian businessman might accept a payment of approximately £25m ($31.9m) for his shares or consider remaining as a minority shareholder.
The issue of 777’s loans is more complicated, as its assets are now effectively under the control of its main creditor, the American insurance firm A-Cap.
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Everton has not had to pay any interest on 777’s loans yet and they are not due for repayment until 2026. It is unlikely that A-Cap would agree to write off a significant chunk of Everton’s debt but it would probably agree to swap it for a longer-term loan, at a lower rate of interest.
If all this is agreed, a new owner at Everton could refinance the club’s borrowings, and recapitalise the business, with the type of long-term, low-interest, senior debt package that Tottenham Hotspur used to pay for their new stadium.
The amount that could be raised in this way would depend on the new stadium’s project revenues, with experts telling The Athletic that a figure in the region of £350m ($447m) should be achievable and there would be no shortage of lenders willing to take on that risk.
That would still leave Everton carrying large amounts of debt for the foreseeable future and would mean that much of the increased revenue from the new stadium would be used to service that debt.
But a deal along these lines would get the club under new ownership and in their new stadium, without having to go through the trauma of shedding debt via administration.
There would also be opportunities for the new owners to bring in more revenue by selling the women’s team, as other Premier League clubs are considering, and selling the new stadium’s naming rights.
With a change of government expected in the UK this summer, there is the prospect of more public funding for the regeneration of the area around the Bramley-Moore Dock stadium that would increase the stadium’s value.
Bell, Moshiri, Zeus Capital and BDT & MSD Partners have been contacted for comment, while Everton declined to comment.
(Alex Pantling/Getty Images)
