The 2016 Takeover Thread

[andyh]

Buy cheap, sell high?

the sell high aspect doesn't work though does it?

Randy has been trying to sell a premier league club for 2-3 years for £250m reducing down to £150m.

even this season, knowing that TV money was coming, no one jumped in to buy the club and save it.

the club is running at a loss, with dwindling commercial revenue because of relegation.

so, even if Chinese VC's bought the club for £100m, with reduced income, high running costs, the need for investment on the playing side, and the debt, they would still need to chuck in multi millions. 

They would never make a profit on the club, even if we got promoted at the first attempt. And that's on the assumption there would be buyers out there.

For me, this doesn't stack up.

[JAMAICAN-VILLAN]

8 minutes ago, andyh said:

Buy cheap, sell high?

the sell high aspect doesn't work though does it?

Randy has been trying to sell a premier league club for 2-3 years for £250m reducing down to £150m.

even this season, knowing that TV money was coming, no one jumped in to buy the club and save it.

the club is running at a loss, with dwindling commercial revenue because of relegation.

so, even if Chinese VC's bought the club for £100m, with reduced income, high running costs, the need for investment on the playing side, and the debt, they would still need to chuck in multi millions. 

They would never make a profit on the club, even if we got promoted at the first attempt. And that's on the assumption there would be buyers out there.

For me, this doesn't stack up.

Could be LONG term venture capitalists.

[dudevillaisnice]

It's hard to know what exactly the intentions are until it actually goes through. Maybe the names of the individuals involved might shed some light on what they might do but to me it sounds reasonable enough. Also depends on what type of money it is i.e state backed which is probably most likely if they are looking for results. 

[NurembergVillan]

Did someone post on here about the value of football in China? I read a piece about how the government want China to have more presence within football, including the national team, and so that's why all these Chinese clubs are spending millions on talent from Europe. It helps them curry favour with the leaders.

This could be a similar scenario. Look at the impact on Abu Dhabi and Qatar from becoming so high profile in football. The profit aspect may not be related just to Villa's balance sheet if the club are seen as a marketing investment for something else.

90% of foreign awareness of Abu Dhabi stems from Manchester City. No billboard or tv campaign can generate those types of results.

[ferguson1]

Have to say that I am completely out of my depth with business and what any potential takeover really means but surely when buying anything in life, you don't particularly want to loose money? Any investor wants a return, exposure etc and big loses not an option.  Am I being too simple here?  

[Godders]

36 minutes ago, andyh said:

so, even if Chinese VC's bought the club for £100m, with reduced income, high running costs, the need for investment on the playing side, and the debt, they would still need to chuck in multi millions. 

They would never make a profit on the club, even if we got promoted at the first attempt. And that's on the assumption there would be buyers out there.

For me, this doesn't stack up.

So by that logic, we're so f***ed that AVFC will never turn a profit again then. May as well wind the club up now then.

If they want to try and turn a profit, then they have to make us successful. Even if they fail at turning a profit, then the inference is that in doing so, they would at least have tried to make us successful, which is a hell of a lot more than we've seen for the last 5 years.

[ferguson1]

5 minutes ago, Godders said:

So by that logic, we're so f***ed that AVFC will never turn a profit again then. May as well wind the club up now then.

If they want to try and turn a profit, then they have to make us successful. Even if they fail at turning a profit, then the inference is that in doing so, they would at least have tried to make us successful, which is a hell of a lot more than we've seen for the last 5 years.

This for me and I may have not put my point across very well above.  Would rather see an investor/board having a go, than a current owner that doesn't want to.

[Gary Thomas]

http://www.birminghampost.co.uk/business/business-news/chinese-investors-plan-fund-major-9197520

I saw this in the Birmingham from last year and wondered if it had anything to do with our Chinese investment group.  Nothing to suggest it is GlobalChina Wealth Management, but it there could be a link.

 

Quote

Chinese investors' plan to fund major Birmingham regeneration schemes

Consortium plans to filter capital from the super-rich of China and Taiwan into property, infrastructure and energy schemes.  A group of wealthy Far Eastern investors are planning a major spending spree in Birmingham – and have huge regeneration schemes in their sights. A consortium headed up by Denise Li, president at GlobalChina Wealth Management Company, plans to filter capital from the super-rich of China and Taiwan into property, infrastructure and energy schemes in the UK. Speaking to the Post on a visit to Birmingham, Ms Li said the city was its principal focus, rather than London, which she said was “saturated”. While Ms Li did not reveal potential investments, the group’s spending power would stretch to huge schemes like the Birmingham Smithfield development at the Wholesale Markets, regeneration around Curzon Street Station and the Icknield Port Loop residential quarter. A group, which included one of Taiwan’s richest men, met Birmingham City Council’s deputy leader Ian Ward last week to discuss investment opportunities. Ms Li, a former Miss Taiwan, said she wanted to use Birmingham as an exemplar to show how Far Eastern investment can help cities in the west to achieve growth ambitions. She said: “We consider Birmingham to be the best city for this. “It is developing. Everyone knows about London – it is a great city but it is saturated and hasn’t got much room to grow. “We want to be building something new. “We believe there is a very bright and interesting project here and it could change the relationship that Birmingham has with the Chinese. “We want to offer job opportunities and help improve the lifestyle of British people and provide a demonstration of how to invest in a city for the 21st century. “There is money ready and waiting for us to do this.” Ms Li has established an equity company to invest in the UK, aided by Birmingham property developer Anthony McCourt and James Ng, a consultant at Wragge Lawrence Graham & Co in the city. It will filter money from high net-worth individuals in China and Taiwan, as well as banks and third-party funds, to schemes in the UK, largely focused in the Greater Birmingham region…….

The story goes on………..

 

Edited May 8, 2016 by Gary Thomas

[Kingman]

4 hours ago, srsmithusa said:

don't you mean moot?

don't you mean moot?

don't you mean moot?

There's an echo in here I said there's an echo in here.

[Sam3773]

All that line says to me is "Oh it's a group. They must want to turn a profit! Put it in the article!" Unless the Mirror have interviewed Wang (if it is him), how the hell can they know their intentions?

More importantly, it says they were at the game yesterday. Anyone re-watched some clips or anything and spot them?

I was really hoping for the American bidder but a lot like the Mirror, we know nothing about their intentions. Ellison might have wanted to rename us the Oracle Villans who play at Oracle Park. We may never know.

[Jareth]

The Chinese LOVE a gamble, I imagine their venture capitalists are the epitome of this. They also happen to have a middle class of 108 million people, bigger than the US, to sell AVFC to - this could be flippin huge. 

[Kingman]

Nooooo, Looks like Richardson and Nzog about to get contract extensions then!

[NurembergVillan]

35 minutes ago, ferguson1 said:

Have to say that I am completely out of my depth with business and what any potential takeover really means but surely when buying anything in life, you don't particularly want to loose money? Any investor wants a return, exposure etc and big loses not an option.  Am I being too simple here?  

In isolation you're right. If you owned one business, or sold one product, you'd want it to make a profit.  When it's part of a portfolio, though, sometimes it can make sense to take a hit on one thing in order to increase profits in another.

Even a visit to the supermarket shows you this.  Items on special offer aren't necessarily making a loss, but they're not earning as much money as they might in order that they draw you in to also buy other items at full price.  Bringing it closer to home, football clubs and players are referred to in the wider industry as "sports marketing assets".  They're exactly that. Marketing vehicles for a bigger picture.  Adidas pay Man Utd around £50m per year to make their kits.  They'll never make all that back from selling Man Utd shirts, but the increase in profile means they'll sell a lot more other products than if they just sponsored, say, Small Heath.

So how does China factor into this? Who knows. Maybe the investors have a portfolio of products they want to promote.  Perhaps an airline like Etihad with Man City.  Etihad opened a hub at Manchester Airport, and wanted the exposure to rival Dubai, where the government wanted to make their own airport a gateway to Asia - people flying from Europe would connect there (and spend money there) before carrying on to their final destination.  The Abu Dhabi group didn't want Dubai having it their own way and didn't just sponsor a shirt or stadium (like Emirates have) but took ownership of a club who they've propelled to being one of the most important in Europe.  Part of a bigger scheme such as bringing a Grand Prix to the country too.

TLDR; Sometimes return on investment isn't as easy to map out as "I spent £100m on a football club so I need to make over £100m back", because as you rightly mention the word exposure can lead to increased returns on other things you own.

[villan-scott]

I'd be happy with the Chinese group. I would imagine they're ambitious and want us back in the big time sooner rather than later. 

At the end of the day we have no control over it, let's just enjoy the ride and be thankful Lerner will hopefully be a thing of the past. 

[PieFacE]

The news that new owners would want to make more money is hardly something to be concerned about.  It's better then having new owners who spunk money away stupidly such as Randy. 

 

For them to make money they'd have to have a plan to make us a winning team,  increase commercial revenue and get us back in the Premier League.  That's no bad thing...  

[Gary Thomas]

10 hours ago, Craigy1874 said:

Not sure if i like the sound of this http://www.mirror.co.uk/sport/football/news/aston-villa-verge-100m-sale-7921768

This article is positive in my opinion.  The line "this private equity firm has studied the success at Leicester and believes it can make some cash of its own" sounds like something a lazy reporter would say, not an investor.  All the article really says is a Chinese investment group is close to buying the club.  Well, we kind of knew that was likely and the article seems to confirm what Hollis said on Friday.  In his statement Hollis also said "our negotiations are now with those parties that we believe will have the passion and ambition to return the Club to winning the highest honours in European football."  So if we trust SH (and I don't think we have any reason to believe he would lie about that) we could have Chinese backed investment with ambitions to return the Club to winning the highest honours.  Well that is good enough for me.  Of course, there are oncerns and anxieties but we need change so it is a risk we have to take. One thing is for sure, any investor will want us back into the premier league as quickly as possible.

[terrytini]

I can't help wondering if people would be as worried if it had said "German financiers" instead of Chinese venture capitalists" ? 

Everyone knows ANYONE is a risk. But we had a benevolent American billionaire and he is the worst thing to happen to the Club.

Whoever we get, we want them to have ' making money' (overall) on their list, else we are doomed. Whether that means specifically making money on income from the Club, or as mentioned above the Club are just one part of a money making strategy isn't clear, doesn't need to be clear, and ultimately doesn't really matter. As long as they know their sums.

Ascsomeone said earlier, the chants were 'Lerner Out', hard to complain if that's the result.

[Kingman]

There's no garentee they will be an instant success, however they will have to go some to be worse than Lerner.

To facilitate FFP I'm all for playing at The Wing Yip Stadium.

[sidcow]

3 hours ago, Jareth said:

50/50

I am certain it could go either way 

[Jareth]

5 minutes ago, Kingman said:

There's no garentee they will be an instant success, however they will have to go some to be worse than Lerner.

To facilitate FFP I'm all for playing at The Wing Yip Stadium.

No need - sell 1 million shirts to their middle classes - manufacturing price of said shirt in China - 10p - margin £20 - that's £20 million right there - we can magic up money anytime.