Romanov poised to take control but faces long-term challenge

STUART BATHGATE

VLADIMIR Romanov's strategy to tighten control at Hearts has been a simple one: buy up a dominant shareholding, and threaten to pull the plug if opposition becomes too vocal. He unsuccessfully employed the latter tactic when asking George Foulkes, the former chairman, to go along with the sacking of chief executive Phil Anderton, and his associates have used it in their share offer document by implying they will only continue their involvement in Hearts if they achieve the 75 per cent shareholding needed to delist the club from the London Stock Exchange.

The Anderton argument excepted, such tactics have worked so far, when the only apparent alternative to Romanov and his appointees on the board of directors has been a return to the bad old days. Club spokesmen have suggested to critics of recent events at the club that they should think back a year and compare then to now. A full Tynecastle or a three-quarters-empty Murrayfield; Vladimir Romanov or Chris Robinson; a team struggling to stay in the top six or one seriously striving for honours.

It is a stark choice, and one which would be answered with near unanimity by Hearts supporters. If an alternative to Romanov appeared on the scene, however, that unanimity would vanish, and the Baltic businessman would, at the very least, have to become more conciliatory in his attitudes.

Romanov certainly was "the only show in town" a year ago, when he reached agreement to buy control of the club from the then chief executive Chris Robinson. But, while there was no-one else around then with the will and the wherewithal to take over at Tynecastle, the position now could well be different according to those who have been trying for some time to attract more widespread investment to the club.

Such investment has also been sought by Romanov himself, who since taking over has talked of his desire to involve the Edinburgh business community. Growing disenchantment about his methods, however, has increased the probability of any such would-be investors seeing themselves as alternatives to the Lithuanian rather than minor associates of his.

Romanov is still almost certain to increase his grip on Hearts before any alternative appears. He is close to completing the purchases which would take his stake to around 72 per cent, and it would not take much after that to push on to 75 per cent.

Only a counterbid of 40p per share - compared to the 35p he is obliged to offer - can prevent the completion of his "irrevocable" agreements to buy from Leslie Deans, Robert McGrail, SMG and HBOS, and that is implausible. But, while the jump from 72 to 75 per cent could be achieved by buying one or two of the remaining sizeable holdings, a move from there to the 90 per cent which would trigger a compulsory purchase of all remaining shares would be altogether more problematic.

Long before Romanov came on the scene, most supporters were agreed that delisting was the way ahead for Hearts, so the majority shareholder's search for a three-quarter share in the company will in itself cause little disquiet. As Romanov has already said he approves of the sale of some shares by Deans and McGrail to the Hearts Supporters Trust, and as he has also acknowledged the sentimental attachment to the framed certificate on the wall which makes many fans loath to part with their holdings, he appears at present unlikely to go for the 90 per cent. What should be clear to Romanov by now, however, is that if that position changes and he decides he wants to go for broke after all, the opposition will be entrenched and substantial.

A bid for 100 per cent of the company would be seen as nothing more than evidence of a desire to take control for its own sake, and to eliminate even token dissent. It would also be wasteful of time, resources and money, as stockbrokers scoured Edinburgh and environs for thousands of long-forgotten holdings of a few shares each.

Romanov would therefore be well advised to stick at 75 per cent. If and when he does that, Hearts will no longer have to pay administration fees to the London Stock Exchange, or conform to a number of petty regulations which do little but hamper their ability to communicate directly with their supporters. If he bids for an even bigger holding, and indeed if he continues to make the kind of impulsive actions which he has done over the past few weeks, opposition to him will become more entrenched.

Since taking over at Hearts back in February, Romanov has shown he has the vision to transform the club and the financial muscle to do so as well. Of late, unfortunately, he has also shown he is possessed, in equal part, of a capricious impatience.

It is that impatience which has caused the turmoil of the last few weeks. If he does not curb it, he could find that emerging Hearts-minded players in the business world are becoming increasingly impatient with him.

Taken from the Scotsman