Hicks Sees Liverpool Slip Away

Liverpool FC co-owner Tom Hicks’ bid to keep hold of the English Premier League soccer side has suffered a huge blow as private equity giant Blackstone Group says it won’t be funding it.

A week ago he was reportedly raising money to buy out the club’s debt, although it wasn’t a move that had the support of his fellow board members or the club’s bankers.

He and fellow American co-owner George Gillett Jr., who paid $371 million for the club in March 2007, were thought to be on their way out in April when they were forced to put the club on the market as a condition of Barclays Bank taking financial control.

The deadline was set for Oct. 6, when a $369 million loan from Royal Bank Of Scotland needs to be repaid or the club will face a $9.33 million penalty payment.

Despite reports of interest from a range of parties, all the negotiations are believed to have fallen through because they either couldn’t show they had the money in place or they simply went cold on the deal.

Reports said Hicks was launching another bid to keep hold of the club by securing financing from a private equity company that would share control with him. His plan may well be in tatters if Blackstone has pulled out.

Blackstone subsidiary GSO Capital Partners was believed to have offered Hicks a two-year funding package worth about $436 million.

The funding would have given Hicks until 2012 to sell Liverpool to any investor prepared to match his $930 million valuation of the club. If he fails to find another backer, Royal Bank Of Scotland could foreclose on the loan, seize control, and try to set up another auction in a bid to recoup the $369 million it’s owed.

If successful, Hicks would hope to take full control, significantly reduce debt and provide the 18-time English title winners with funds for new players. It would also see Gillett’s 50 percent stake diluted, with the Colorado native staying at Liverpool in what Associated Press described as “an inactive role.”

Even if Hicks can raise new money and also count on Gillett’s support, which is by no means certain given their stormy relationship, he could still be outvoted by Liverpool managing director Christian Purslow, finance director Philip Nash and commercial director Ian Ayre.

The last year hasn’t been kind to Liverpool’s American owners or their sports investments. Gillett has sold the Montreal Canadiens ice hockey team, the city’s Bell Centre venue, and Gillett Entertainment Group back to the Molson family for $580 million. In May the Texas Rangers, Hicks’ major league baseball team, filed for Chapter 11 bankruptcy protection. Last month team president Nolan Ryan and sports lawyer Chuck Greenberg bought it at auction for $590 million.