Everton takeover: MSP Sports Capital considers return with 777 partners on the brink

MSP Sports Capital could yet return to the table with a takeover bid for Everton as a deal with 777 partners teeters on the brink of collapse.

The US investment firm, as first reported by Bloomberg, is understood to be considering whether a takeover bid for the Toffees is viable after 777 Partners’ planned takeover of the club hit serious snags.

Everton owner Farhad Moshiri met with 777 Partners co-founder Josh Wander in London earlier this week in a bid to gain some clarity on the Miami group’s ability to proceed with the agreed purchase of the club after charges of fraud were made in the civil court. files in New York.

The allegations, the latest in a string of claims about unpaid debts by the company and its subsidiaries, were brought by London-based Leadenhall Capital in connection with the firm’s financing of 777, where it claimed they used collateral that either “didn’t exist” or wasn’t owned by Wander’s entities.

READ MORE: Everton takeover: Farhad Moshiri and 777 Partners hold face-to-face talks as concerns grow

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This, which came in the same week as it emerged that players from Belgian side Standard Liege, a club that is part of 777’s football portfolio, had allegedly not been paid this month, prompting Moshiri to are seeking talks with 777, sources have confirmed, with Everton’s majority shareholder on the brink of scrapping the deal which was agreed in September but was put on hold due to a lack of approval from the Premier League.

In March, the Premier League granted conditional approval for 777 to take over, subject to four caveats being met. These were: that 777 loans to the club, now totaling more than £200 million in junior debt, must be converted into equity; funds are required in an escrow account to meet financial obligations for the remainder of the season; proof of funding for the completion of the new stadium; and a £158m loan to be repaid to MSP, the New York firm which loaned money to Everton last year to build the stadium.

The loan from MSP was due on April 15, with 777 scrambling to get MSP to extend the loan repayment, which the firm reluctantly agreed to, although it said the extension was “weeks, not months “.

MSP, a firm run by billionaire Jahm Najafi and former sports super agent Jeff Moorad, emerged in early 2023 after they were in talks to take a 25% stake in the club through convertible debt. However, the deal was rejected by one of Everton’s biggest creditors, Rights and Media Funding Limited, who objected on the grounds that the deal could dilute their own security.

MSP’s loan was secured against Moshiri’s Blue Heaven Holdings Limited, the company that owns Everton, with the New York firm having the option to take a controlling stake in the event of a loan default.

This did not happen, but MSP is now assessing whether buying the club may now be the best course of action given the increasing likelihood that the 777 deal will collapse imminently.

MSP needed to have an element of operational control at board level where the original 25% deal was done last year which ended up being just a direct loan to the club and with so much capital tied up in the club, so he could now. believe it is the best course of action to protect their investment and make a bigger profit.

It is in everyone’s interests to see the stadium at Bramley Moore Dock developed given its value as an asset and if someone like MSP can come in, clean up the club and its balance sheet, protect its value and then sell it to a new owner in around 18 months, which may now be compelling given the expectation that the 777 deal will not move from the Premier League.

There is a precedent for this kind of game in Europe.

A similar situation occurred in Italy in 2022, when the former owner of AC Milan, Li Yonghong, could no longer finance the club and could no longer pay the loans to the American hedge fund Elliott Management.

Elliott, a firm run by Wall Street veteran Paul Singer, had no prior history of owning a sports team and no plans to, but it cleaned up Milan as an asset before selling it to RedBird Capital Partners for 1 .2 billion dollars.