Morgan struggles to win over shareholders

Steve Morgan may have won over the Kop, but his £73m (€108m) package to buy his way into Liverpool has not been met with the overwhelming approval of many small shareholders.

The millionaire businessman was given a hero’s reception as he strode into Anfield before Saturday’s 1-1 draw with Newcastle and took up his seat in the directors’ box near to chairman David Moores.

But although the Kop paraded banners like “We want Morgan, say no to Thai blood money”, there are many shareholders who are not in favour of the Jersey-based former building magnate’s rights and share issue scheme.

One shareholder said: “I have taken lots of calls from shareholders with holdings not too much different to Steve’s 5%, and lots are not happy with the scheme he has put forward. They are clearly being asked to finance Steve’s offer to the club.

“Not only would Moores have to pay something like £30m (€44m) to buy enough new shares to maintain his majority holding, all the other shareholders are being asked to pay out too if they want to keep their percentages.

“The amount of shares would double, everybody’s holding would be affected, and the share price would drop.

“Frankly, Steve is asking all of us to fund his own offer of £73m (€108m). He has underwritten it, but if shareholders don’t want to see their holdings devalued, they have to buy into the rights issue.”

That would reduce considerably how much Morgan would have to pay out as underwriter for the deal.

Morgan would only say as he entered Anfield: “I can only thank the fans for their support, it has been fantastic.”

And chief executive Rick Parry, when asked about the Thai deal, said: “There is nothing more on that.”

The Liverpool board are still considering the £60m (€88.9m) offer from Thai prime minister Thaksin Shinawatra to buy 15,000 new shares at £4,000 (€5,900) each, twice the amount Morgan’s offer values them at.

Sources at Anfield admit that the uproar over the Thai bid and the anger amongst Liverpool fans over dealing with a country with such a bad human rights record is deeply concerning the board.

It is being suggested one way around the current impasse would be for Morgan to take on the terms similar to the Thai deal and buy some of the shares that have been offered to Thaksin.

That would keep his new holding well below Moores, who would drop from majority to major shareholder but still control the club. Such a situation would reduce Morgan’s chances of ousting boss Gerard Houllier, who has been given the support of Moores and the board to take the club into next season.

But the Anfield board are far from happy with Morgan’s present offer, which they feel undervalues the club and described last week as “not attractive.”

It certainly was not attractive for Moores. Under the proposals it would cost him £30m (€44m) to buy into the rights issue and retain his majority holding, and around £20m (€29.6m) just to remain happy as the major shareholder.

Morgan would have been able to buy his extra 5%, equal to his current holding, and would almost certainly have mopped up Granada’s 9.9%, because the TV giants are seemingly unwilling to put any more money into the club.

The danger for Moores with Morgan’s current offer is that many small shareholders, and probably himself, would not take up their rights issue and Morgan would almost certainly be able to take a controlling interest of the club.

But Morgan’s attack on manager Gerard Houllier is considered to have further entrenched the board, and one source said: “To have been so openly against the manager, and therefore, the chairman, has not helped the sides come together.”

Morgan gave the board seven days to accept his offer when it was made last week, and it is unlikely that his deadline will be met.

Now Liverpool’s under-pressure directors must decide whether to go with the Thai bid and risk the wrath of the majority of fans.