Romanov takes full control at Hearts

Ewan Murray
Saturday October 22, 2005
The Guardian

Vladimir Romanov may well be edging towards a Malcolm Glazier-style buy-out of Heart of Midlothian, but the Lithuanian banker can rest assured that he will not suffer the same backlash from supporters and minority shareholders as the American tycoon received at Old Trafford.

The Edinburgh club announced to the stock exchange yesterday that Romanov had negotiated an irrevocable 35p-per-share settlement for the Scottish Media Group's 19.9% holding. A similar deal is imminent with Halifax Bank of Scotland and other minority shareholders, including the former chairman Leslie Deans and the Edinburgh businessman Robert McGrail, which will take his stake to more than 70%.

His plan is to de-list the club from the stock exchange and return them to a private limited company, as they were 20 years ago under Wallace Mercer, but that can be achieved only when Romanov owns 75% of the company. However, with the club chairman George Foulkes urging supporters to sell their shares, reaching that target appears to be a formality.

Romanov, who also has financial interests in MTV Ripo of Belarus and the Lithuanian club FBK Kaunas, does not plan to stop there. In restating a desire to take Hearts to the summit of European football, the man with an estimated personal fortune of £260m said he wants to take a 90% stake which, in turn, would mean any remaining shareholders must accept his 35p-per-share offer.

Romanov said: "It is an important day for me. Looking to avoid the factionalism and conflict with shareholders is one of the reasons why I sought to acquire an increase in my shareholding. I understand the increased responsibility and it will act as a stimulus to act in the best interests of the club."

Hearts have spoken to shareholders for more than two years about de-listing, a process which the finance director Stewart Fraser has estimated costs the club around £250,000 a year.

The Scottish Media Group invested in Hearts via shares and a loan to the tune of £8m in 1999. The remaining loan stock has also been transferred to Romanov's bank, Ukio, as part of yesterday's deal, but SMG have been forced to accept a substantial loss on their Scottish football experiment, having received £900,000 for their shares. Their representative on the Tynecastle board, David Archer, has resigned.

Taken from the Guardian/Observer