Pace/ALK set to buy Espanyol?

[Clive 1960]

I'm all against this multi ownership but i wonder if Bob Lord was alive would he have bought into Espanyol .

[123EasyasBFC]

That love-in is from people who really cannot see any pitfalls whatsoever and people who cannot see any fault whatsoever in the way our club was bought or is run. If it wasn't a serious matter, it would be laughable.

Thankfully we have a good manager who knows what's needed and let's hope he gets that. We are returning to the PL while our owners are seemingly occupied elsewhere.

The ‘love-in’ really isn’t that deep, it’s a few fans on X having a laugh, it’s harmless. Fans having a laugh at Espanyol fans now calling out Blackburn doesn’t mean they don’t see fault in the way the club was bought.

Not everything related to the club has to be so serious

[123EasyasBFC]

I’m not remotely interested in the fortunes of Espanyol and the social media love-in currently taking place between the two sets of fans is frankly bizarre. No doubt it’ll soon sour once one of the two clubs becomes subservient to the other.

What I’m interested in is getting our team ready for a tough season in the Premier League. At the moment the midfield looks too weak and I’ve no idea where the goals are coming from.

What I do hope is that this takeover doesn’t detract from giving Scott Parker a fighting chance this season in any way.

Nothing bizarre about two sets of fans just having a laugh on socials. Most of the interaction between the two sets of fans looks to be at Blackburns expanse, it’s not that deep.

[aggi]

I doubt the club is saleable at the moment as a single business unless ALK take a big loss or we go into administration. Their may come a time when ALK can sell it at a reasonable price but I don't think they will be able to any time soon.

A buyer would have to pay ALK £200 million plus for the shares, service the nigh on £200 million worth of creditors and presumably find a £100 million or so to invest in the squad on the presumption that ALK are unlikely to sell while we are in the PL or receiving parachute money. Quite simply the leveraged buyout and subsequent borrowing has made it pricey for new owners.

If the group is successful I would guess it's shares would become a vehicle traded between Private Equity companies who see it a good fit with their existing portfolios.

It was always ALKs plan to create an investment group and our future is immediate future entirely intertwined with ALK and the new Chinese ownership. I think most people are concerned to varying degrees apart from possibly Paul. Some can see the potential, which I think is fair enough and others like me just see the risk both to the club and to football as most of us have known it.

I think that we're probably still around a £200m-£250m valuation but that doesn't mean a buyer would be paying ALK £200m plus another however many million to settle the creditors.

A deal of that sort would be likely £100m+ profit for ALK and the valuation doesn't justify that. More likely would be £200m to ALK but ALK then settling the £100m debt which could largely be used to settle the creditors (if viewed as necessary) and ALK still breaking even/making a small profit.

Obviously ALK have shown no indication of selling but the above is the more likely walking away scenario.

Of course if we're down in the Championship and struggling to get promoted then it becomes a different conversation.

[BurnleyFC]

Not going to lie, regardless of the pros and cons of the takeover and the morality of multi club ownership, I’ll definitely take an interest in Espanyol’s results now.

Barcelona was already my favourite city in the world and I may just have to visit it again soon. Might even pick up an Espanyol shirt and game while I’m over there.

[gandhisflipflop]

That love-in is from people who really cannot see any pitfalls whatsoever and people who cannot see any fault whatsoever in the way our club was bought or is run. If it wasn't a serious matter, it would be laughable.

Thankfully we have a good manager who knows what's needed and let's hope he gets that. We are returning to the PL while our owners are seemingly occupied elsewhere.

And who appointed the good manager? And the manager before him?

[SlidingTackle]

It's Burnley, not Espanyol, or Barcelona?

[ksrclaret]

I’m not remotely interested in the fortunes of Espanyol and the social media love-in currently taking place between the two sets of fans is frankly bizarre. No doubt it’ll soon sour once one of the two clubs becomes subservient to the other.

What I’m interested in is getting our team ready for a tough season in the Premier League. At the moment the midfield looks too weak and I’ve no idea where the goals are coming from.

What I do hope is that this takeover doesn’t detract from giving Scott Parker a fighting chance this season in any way.

I think this is the most sensible post on this thread.

[ClaretTony]

The ‘love-in’ really isn’t that deep, it’s a few fans on X having a laugh, it’s harmless. Fans having a laugh at Espanyol fans now calling out Blackburn doesn’t mean they don’t see fault in the way the club was bought.

Not everything related to the club has to be so serious

We are looking in different places then

[ClaretTony]

And who appointed the good manager? And the manager before him?

And the relevance is?

[123EasyasBFC]

We are looking in different places then

Can you reference apparent ‘love-in’ from fans which shows they have a lack of understanding of how the club was bought. It doesn’t have to be turned into a negative everytime the owners are involved.

[gtclaret]

I'm a Burnley fan,not an ALK fan,I want what's best for Burnley,I have no interest in any other clubs owned by ALK.
From what I've just read Pace will be spending his time with Espanyol,and the will be the parent club obtaining quality loan signings from Burnley.How can any Burnley fan be happy about this

[ŽižkovClaret]

I'm a Burnley fan,not an ALK fan,I want what's best for Burnley,I have no interest in any other clubs owned by ALK.
From what I've just read Pace will be spending his time with Espanyol,and the will be the parent club obtaining quality loan signings from Burnley.How can any Burnley fan be happy about this

Less chance of a drum?

[gandhisflipflop]

And the relevance is?

Well you have obvious concerns on how the club is being run and you have said thankfully we have got a good manager. I think it’s totally relevant to point out that those same people identified him and appointed him so they are making sound decisions for balance.

[Row x]

I'm a Burnley fan,not an ALK fan,I want what's best for Burnley,I have no interest in any other clubs owned by ALK.
From what I've just read Pace will be spending his time with Espanyol,and the will be the parent club obtaining quality loan signings from Burnley.How can any Burnley fan be happy about this

The only mention of where Pace is spending his time, and parent clubs is one article from an untrusted source.

It's worth waiting for more reliable reports before deciding whether to be happy or not

[ClaretTony]

Well you have obvious concerns on how the club is being run and you have said thankfully we have got a good manager. I think it’s totally relevant to point out that those same people identified him and appointed him so they are making sound decisions for balance.

Which isn’t relevant to the situation I raised.

[KRBFC]

Some of the posters on here are hilarious, acting like we’re Man City and our fringe young players can be rounded up and sent to develop and play regularly in La Liga.

[KRBFC]

The problem I have with this is the finances.

Where is the 180m coming from to buy Espanyol?

Are BFC financially losing out? Will our budgets be cut to support Espanyol financially? If we sold a player for £40m, does that £40m fully remain with BFC?

[123EasyasBFC]

The problem I have with this is the finances.

Where is the 180m coming from to buy Espanyol?

Are BFC financially losing out? Will our budgets be cut to support Espanyol financially? If we sold a player for £40m, does that £40m fully remain with BFC?

We have already committed to spending 60m this summer, apparently had a 10m bid for watfords striker rejected, had 18m fee agreed for Diouf, that doesn’t look like it’s cutting its budget to support Espanyol

[BurnleyFC]

I'm a Burnley fan,not an ALK fan,I want what's best for Burnley,I have no interest in any other clubs owned by ALK.
From what I've just read Pace will be spending his time with Espanyol,and the will be the parent club obtaining quality loan signings from Burnley.How can any Burnley fan be happy about this

He’s going to have to change his Instagram and X name then.

[KRBFC]

We have already committed to spending 60m this summer, apparently had a 10m bid for watfords striker rejected, had 18m fee agreed for Diouf, that doesn’t look like it’s cutting its budget to support Espanyol

They’ve only just got their feet under the desk. If we stay up and Espanyol get relegated, are BFC suddenly bank rolling Espanyol? Therefore we’d be losing out.

[NewClaret]

They’ve only just got their feet under the desk. If we stay up and Espanyol get relegated, are BFC suddenly bank rolling Espanyol? Therefore we’d be losing out.

I think that’s impossible under the rules.

[123EasyasBFC]

They’ve only just got their feet under the desk. If we stay up and Espanyol get relegated, are BFC suddenly bank rolling Espanyol? Therefore we’d be losing out.

Why worry about such hypothetical things, if we stayed up then from a business point of view what sense would to make to cut founding to a premier league club

[ClaretPete001]

I think that we're probably still around a £200m-£250m valuation but that doesn't mean a buyer would be paying ALK £200m plus another however many million to settle the creditors.

A deal of that sort would be likely £100m+ profit for ALK and the valuation doesn't justify that. More likely would be £200m to ALK but ALK then settling the £100m debt which could largely be used to settle the creditors (if viewed as necessary) and ALK still breaking even/making a small profit.

Obviously ALK have shown no indication of selling but the above is the more likely walking away scenario.

Of course if we're down in the Championship and struggling to get promoted then it becomes a different conversation.

I don't think ALK have any intention to sell either.

But yes It would be dependent upon ALKs view at any given moment in time. For ALK to realise the full value of the asset someone would have to pay £200 million and take on the Creditors as well as having money to invest.

But you are right the intercompany debt would be an issue and I guess that could be used to pay down the creditors if ALK was happy for it to be part of the deal.

[ClaretPete001]

We have already committed to spending 60m this summer, apparently had a 10m bid for watfords striker rejected, had 18m fee agreed for Diouf, that doesn’t look like it’s cutting its budget to support Espanyol

I'd keep your powder dry because we haven't committed to spend £60 million - we don't know who is yet to be sold.

[dsr]

I think that’s impossible under the rules.

I'm sure it's not. As we well know, it is permissible for the owners to withdraw £100m from the club and force the club to borrow money and pay swingeing interest to fund it. If that's legal to the extent they have already done it, then it is certainly legal to extend it.

I'm sure they have a way to funnel cash round the murky system of holding companies so it ends up at Espanyol, if desired.

However, I think it's unlikely. They have invested nothing in Burnley FC, quite the reverse. I'm sure they haven't bought Espanyol because they want to put money in - quite the reverse, I dare say.

[Big Vinny K]

I'm all against this multi ownership but i wonder if Bob Lord was alive would he have bought into Espanyol .

Only if he could source some cut price ham !

[claretonthecoast1882]

I have heard we are going to start playing in their colours, adopt their badge, only accept Euros in the club shop and all stadium announcements will be in Spanish.




Might as well join in with the levels of stupidity being shown

[Chester Perry]

The problem I have with this is the finances.

Where is the 180m coming from to buy Espanyol?

Are BFC financially losing out? Will our budgets be cut to support Espanyol financially? If we sold a player for £40m, does that £40m fully remain with BFC?

The latest numbers beting quoted are interesting

deal value of EUR 130m - with EUR 65m upfront and EUR 65m of shares in Velocity Sports Limited (Jersey) giving RASTAR 16.45% of VSL (which values VSL at EUR 395m)

There are reports of an opportunity for Velocity to buy back those shares for a premium that carries a built in inflation surge

RCD Espanyol football team bought by investor Velocity Sport Limited
Rastar group, current owner of club, to enter investment fund shareholders as part of deal
https://archive.ph/jWuo1

you get the impression that Velocity will be picking up the cost of funding operating losses - which has been a factor in RASTAR wanting to exit

[NewClaret]

I'm sure it's not. As we well know, it is permissible for the owners to withdraw £100m from the club and force the club to borrow money and pay swingeing interest to fund it. If that's legal to the extent they have already done it, then it is certainly legal to extend it.

I'm sure they have a way to funnel cash round the murky system of holding companies so it ends up at Espanyol, if desired.

However, I think it's unlikely. They have invested nothing in Burnley FC, quite the reverse. I'm sure they haven't bought Espanyol because they want to put money in - quite the reverse, I dare say.

I think CP said one club funding another was illegal under regulations, and Textor got done for attempting the same with Botafogo and Lyon. Not sure on the specifics, although I’m not sure how it’s monitored or prevented in the scenarios you describe.

[Jakubclaret]

I'd keep your powder dry because we haven't committed to spend £60 million - we don't know who is yet to be sold.

It's not just that. it's easy to commit if you know that it'll never be fulfilled. In essence you could bid & commit to anything without agreeing on personal terms it's a meaningless action.

[Chester Perry]

I think CP said one club funding another was illegal under regulations, and Textor got done for attempting the same with Botafogo and Lyon. Not sure on the specifics, although I’m not sure how it’s monitored or prevented in the scenarios you describe.

Not me

though Textor failed to convince the DNCG that all assets in Eagle Football meant that Lyon were not in financial distress

[NewClaret]

you get the impression that Velocity will be picking up the cost of funding operating losses - which has been a factor in RASTAR wanting to exit

What are the annual operating losses CP?

[NewClaret]

Not me

though Textor failed to convince the DNCG that all assets in Eagle Football meant that Lyon were not in financial distress

My bad then. I’m sure I read something on here.

So can one club fund another under MCO regulations then?

[IanMcL]

How have you read that and jumped to the conclusion that Burnley will be loaning players out on the cheap and building more debt into Burnley?

Yes! Based on the fact that they are limited in the transfer market and were just above relegation last season.

[aggi]

I don't think ALK have any intention to sell either.

But yes It would be dependent upon ALKs view at any given moment in time. For ALK to realise the full value of the asset someone would have to pay £200 million and take on the Creditors as well as having money to invest.

But you are right the intercompany debt would be an issue and I guess that could be used to pay down the creditors if ALK was happy for it to be part of the deal.

Yes, if the intercompany wasn't going to be paid off and the creditors remain then realistically the valuation would be significantly depressed as you're knocking £100m of assets out of the accounts.

[Chester Perry]

I think that’s impossible under the rules.

not if funds are transferred via inter company loans in the way we have seen previously - it is key that that RCD Espanyol now fall under Velocity Sports Ltd (Jersey) the entity that wholly owns the shareholding in Velocity Capital (UK) Limited the entity that owns 82.7% of Burnley FC Holdings Limited and owes the club circa £97m

in this structure monies can flow up across and down quite legally

[ClaretPete001]

The latest numbers beting quoted are interesting

deal value of EUR 130m - with EUR 65m upfront and EUR 65m of shares in Velocity Sports Limited (Jersey) giving RASTAR 16.45% of VSL (which values VSL at EUR 395m)

There are reports of an opportunity for Velocity to buy back those shares for a premium that carries a built in inflation surge

RCD Espanyol football team bought by investor Velocity Sport Limited
Rastar group, current owner of club, to enter investment fund shareholders as part of deal
https://archive.ph/jWuo1

you get the impression that Velocity will be picking up the cost of funding operating losses - which has been a factor in RASTAR wanting to exit

Could I hazard a guess it's going to be similar to the Burnley deal the difference largely being the money in Burnley's bank is now a share swap.

So, Eur65 million borrowed. Eur65 million share swap and potentially another agreement directly with Rastar to pay a top up on an agreed schedule, which will not be made publicly available.

[NewClaret]

Could I hazard a guess it's going to be similar to the Burnley deal the difference largely being the money in Burnley's bank is now a share swap.

So, Eur65 million borrowed. Eur65 million share swap and potentially another agreement directly with Rastar to pay a top up on an agreed schedule, which will not be made publicly available.

The numbers are startlingly similar! And this is exactly how I expected our deal was done (shares swapped for shares/units in ALKs structure - at least until buy out).

It would not shock me if our previous owners are still invested somewhere down the line.

The bit I’m unsure about is whether this has been bought with debt or a fundraising. CP’s post yesterday suggested AP has been significantly diluted.

[Big Vinny K]

It's not just that. it's easy to commit if you know that it'll never be fulfilled. In essence you could bid & commit to anything without agreeing on personal terms it's a meaningless action.

He means the money we have already spent less the likely money we will get from player sales is going to mean a figure of less than £60m (if we don’t spend any more)

Nothing to do with bidding for players…

[KRBFC]

Why worry about such hypothetical things, if we stayed up then from a business point of view what sense would to make to cut founding to a premier league club

Well where’s the money going to come from? Are they going to turn Espanyol into Wonga FC too?

I don’t want BFC resources being used elsewhere.

I wouldn’t be bothered if Pace was a billionaire, using his own money to buy and fund Espanyol but we both know that’s likely not the case.

[Big Vinny K]

CP’s post yesterday suggested AP has been significantly diluted.

Sounds nasty - it is very hot in Barcelona though

[NewClaret]

Sounds nasty - it is very hot in Barcelona though

[NewClaret]

not if funds are transferred via inter company loans in the way we have seen previously - it is key that that RCD Espanyol now fall under Velocity Sports Ltd (Jersey) the entity that wholly owns the shareholding in Velocity Capital (UK) Limited the entity that owns 82.7% of Burnley FC Holdings Limited and owes the club circa £97m

in this structure monies can flow up across and down quite legally

Thanks CP and apologies KRBFC. Seems I was chatting rubbish.

[Jakubclaret]

He means the money we have already spent less the likely money we will get from player sales is going to mean a figure of less than £60m (if we don’t spend any more)

Nothing to do with bidding for players…

I merely meant disguised sincere intentions to spend money whatever the amount don't have to be realized by a number of ways such as lowballing or knowing that you'll never be able to agree terms with that said player. You get credit after the commitments been completed not before.

[Chester Perry]

The numbers are startlingly similar! And this is exactly how I expected our deal was done (shares swapped for shares/units in ALKs structure - at least until buy out).

It would not shock me if our previous owners are still invested somewhere down the line.

The bit I’m unsure about is whether this has been bought with debt or a fundraising. CP’s post yesterday suggested AP has been significantly diluted.

you are being triggered by the number 65 only it is euros not sterling

The structure is quite different with the only similarity being a ringfence on non-acquired shareholding with a fixed price for a transfer at a future date

If Garlick was involved in Velocity the acquisition of Cheltenham would have been challenged

I am unsure how you arrived at the conclusion of AP's holding being diluted - other than by the long list of investors in Velocity - His position at ALK Capital appears either unchanged or stronger

- the key in regards to Velocity is that the more partners that come on board the greater the level of control he is able to exert due to the nature of the different share types

- it is very unlikely that partners in Velocity will be allocated Management Shares in Velocity Sports Ltd (Jersey)

- we know that Velocity Capital (UK) holdings ltd had circa £80m less than two years ago and more investors have come on board since

[aggi]

I do find the Rastar bit interesting as it's a company I've dealt with a bit over the years. They're a big name in toy cars, particularly licensed ones, and also have a gaming division that does pretty well.

So far as I'm aware they're not massive though, maybe $500m t/o at their peak so Espanyol must have made up a good chunk of that. As others have said, I expect that Rastar are just slowly exiting the market rather than going to become involved in Burnley.

[Orangebernard]

The latest numbers beting quoted are interesting

deal value of EUR 130m - with EUR 65m upfront and EUR 65m of shares in Velocity Sports Limited (Jersey) giving RASTAR 16.45% of VSL (which values VSL at EUR 395m)

There are reports of an opportunity for Velocity to buy back those shares for a premium that carries a built in inflation surge

RCD Espanyol football team bought by investor Velocity Sport Limited
Rastar group, current owner of club, to enter investment fund shareholders as part of deal
https://archive.ph/jWuo1

you get the impression that Velocity will be picking up the cost of funding operating losses - which has been a factor in RASTAR wanting to exit

Hi CP, in your last paragraph you mention that Velocity might be picking up the operating losses of Espanyol but where do you think the funding will come from to do that?

[aggi]

The numbers are startlingly similar! And this is exactly how I expected our deal was done (shares swapped for shares/units in ALKs structure - at least until buy out).

It would not shock me if our previous owners are still invested somewhere down the line.

The bit I’m unsure about is whether this has been bought with debt or a fundraising. CP’s post yesterday suggested AP has been significantly diluted.

I think it was pretty different. From what I remember Garlick and John B kept some of their shares in BFC Holdings post the initial takeover.

[Chester Perry]

Hi CP, in your last paragraph you mention that Velocity might be picking up the operating losses of Espanyol but where do you think the funding will come from to do that?

Hard to say, but initially I would think from the cash that investors have put into Velocity. Of course Velocity could raise cash - from a funding round (see that Bloomberg story) but it is not beyond possibility that RCD Espanyol take on debt to help initially - though that would further affect their ability in the transfer market and with wages under La Liga rules.