Expert: Takeover group spreading wings with Liverpool

Dubai International Capital’s interest in a takeover at Liverpool can be attributed to the oil-rich emirate’s need to diversify in business, according to a football finance expert.

DIC has been given permission to conduct due diligence, examining the club’s accounts, and is expected to submit a formal offer of in the region of £450m (€668.6m) soon after Christmas.

It is one of half a dozen private-equity firms buying up investments around the world on behalf of Dubai Holdings, which is owned by Sheikh Mohammed bin Rashid al-Maktoum, ruler of Dubai and prime minister of the United Arab Emirates (UAE).

The UAE’s vast oil reserves have established it as an economic powerhouse, but with this natural resource running short, the next step has been to invest to secure its future.

DIC’s investment portfolio includes the likes of DaimlerChrysler, the Tussauds Group and Doncasters Group Limited.

Henk Potts, an equity strategist for Barclays Stockbrokers, believes the interest in Liverpool forms part of Dubai’s new outlook.

“I think Dubai International Capital is looking to diversify away from their reliance on oil,” Potts said.

“Oil in Dubai is set to be exhausted over the next 20 years so there has been a big rush from this private-equity firm to diversify.

“They have bought groups like Travelodge Hotels and Madame Tussauds, so they have been buying travel and leisure assets.”

If the takeover is completed, Liverpool would become the sixth Premiership club in the hands of foreign owners and Potts believes overseas is money is flooding into English football due to the lure of the Premier League brand.

“One would suspect that the Premier League is going through a revolution in the way that it is going to be presented on the international stage,” he said.

“The reality is that you have got some very big global businessmen looking at how to maximise the potential from the Premier League and there are a number of other clubs that are going to benefit from this.

“That’s why I think you have seen this wave of international interest in homegrown assets.”

Of the reported £450m (€668.6m) figure, DIC is expected to contribute £200m (€297m) towards Liverpool’s goal of developing a 60,000-capacity stadium at Stanley Park, which Potts feels is essential if the club is to keep up with the Premiership’s major players.

“They (Liverpool) need the money. It’s as simple as that,” said Potts.

“If you look at the amount of money that Arsenal have invested in their new stadium they’re saying that the increase in capacity will boost sales by £35m (€52m) a year.

“In order to compete for the best players it comes down to financial firepower. While Liverpool have clearly been a club who have been able to attract decent players, the very best players haven’t gone to Anfield because they haven’t been able to afford them.”