Liverpool reject Morgan's £50m investment offer

BUILDING tycoon Steve Morgan yesterday revealed Liverpool turned down his bid to inject £50 million (€75m) into the club in a shares issue.

However, Morgan's announcement could be viewed as the first shot in what could prove to be a long battle for control of the Anfield club.

Sources close to the bid suggest Liverpool owner David Moores and his board could have rejected this first offer because of a difference in opinion over the price of shares and because Garston-born Morgan favours a groundshare with Everton.

Morgan, the former owner of Redrow Homes who has amassed a £312m fortune from building and hotel interests plus over £200m more in shares, is the club's third largest shareholder with 5% and wants to use £50m of his own money to bolster team building and plans for constructing a £80m stadium in nearly Stanley Park.

A statement released on behalf of Morgan said: "The proposal has been turned down by the Liverpool board. Mr Morgan now awaits the outcome of the board's strategic and financial review with interest."

The 51-year-old, who also dismissed speculation he wanted to stage a takeover of the Anfield club, had stipulated several conditions. These included the key point that Moores would not be allowed to buy new shares, therefore preventing him from re-establishing his controlling stake of 51%.

But Morgan could also be unwilling to pay the £4,000 price the club is believed to value shares at currently. It is also thought that his views on sharing with Everton, who desperately want to move away from Goodison Park, may not have been greeted favourably by Anfield board members.

The differences between Morgan and Moores, who have had a stormy relationship in the past, could be explained by their individual valuation of what the club is worth.

Moores owns half of the 40,000 shares in circulation. At £4,000 a share, that would make his stake around £80m and the club worth £160m.

But recently it has been possible to buy shares for nearer to £1,500, which would make Morgan's possible valuation of the club considerably less than that of the board. Exactly how many new shares would be issued also has a major input on the overall valuation, and it is believed Morgan wants an interest much closer to the percentage held by Moores.

The statement continued: "In response to press speculation during the last 24 hours, Steve Morgan confirmed that he has not launched a takeover for Liverpool Football Club. He has, however, made a formal conditional proposal to underwrite a rights issue, which would result in a very significant injection of new capital into the club."

There is expected to be further negotiations over Morgan's involvement, with pressure mounting on Moores to do a deal which would see the club receive a significant financial boost at a time when they need it most.

Moores, who has been chairman since 1991, stated at the AGM earlier in the year that he would consider a dilution of his control and even take a step away from the club. If he is perceived by fans as the man standing in the way of new investment at Anfield, his position could become difficult.