Hearts administration: 12 July deadline for bids

HEARTS’ administrators BDO have set a deadline of 12 July for formal offers to be lodged for the Tynecastle club.

A sales memorandum, which includes figures showing that Hearts could make a profit of £400,000 by 2014 based on the cost savings which have now been made, has been issued to all parties who have expressed an interest in buying the club.

BDO also indicated that discussions are ongoing with various groups in Lithuania in a bid to ensure shares owned by UBIG and Ukio Bankas are included in the sale, along with ownership of Tynecastle Stadium. Any parties who wish to receive further details from BDO must now sign a confidentiality agreement.

Foundation of Hearts chairman Ian Murray earlier revealed that his organisation will be able to call upon a substantial cash investment in its bid to buy the club – provided the number of pledges from supporters exceeds a certain total. More than 3,000 pledges have now been converted into monthly direct debits, to be used if the united fans’ group succeeds in taking over the club. Around 600 people have also set up a direct debit without pledging first.

Murray refused to reveal the precise number at which his potential investors will come up with the required money. But, with a total of 6,000 fans having made a pledge before the conversion process started, he has admitted that greater numbers are still needed.

“There are several people with capital considering investment,” the Member of Parliament for Edinburgh South told The Scotsman yesterday. “They know that cash up front will not be enough on its own to run the club, so their investment will be conditional on getting a certain number of people pledging.

“That way, we will have a monthly revenue stream as well. It is important to state that the club has a revenue funding shortfall for any new owner and that also has to be taken into account when determining any bid value.

“These people support the Foundation’s principle of one member, one vote. The money they invest will be repaid, but they are not seeking any more influence than anyone else.”

Murray had previously refused to give any information about the Foundation’s funding, arguing it could influence the price demanded for the club by chief creditors, Ukio and UBIG. But he decided to go public with the news of the has additional backing after becoming concerned by suggestions that the Foundation does not have any money.

“People who have said we have no money may have been unaware of the reality,” he added. “We do have this backing. What’s more, we’re the only group that does have any declared source of income.

“Our bid team have met Hearts’ administrators twice in the past two days. Our aim has been to put in a bid by the end of the month but that is now dependent on when the administrators give us the precise information we need about the club’s finances. So we’re working to their timetable now.

“There is a real sense of urgency. The more pledges we have, the more capital we will get – and the more capital we’ve got, the bigger the chance of being successful in our aim of buying the club and taking it out of administration. So I cannot stress enough that we need as many people as possible to convert their pledges now, because this is a chance to put the club in safe hands that may not come around again in our lifetimes.”

Administrators BDO appear to be working with the Foundation, to the extent that they have offered the group a space in the club shop over the weekend. Visitors to the shop will be able to buy Hearts merchandise and will also be able to pledge directly to the Foundation, or simply receive more information.

The Foundation has also been given indirect access to the club’s database of 71,000 names. A mailshot from Hearts has spelled out the current plight of the club and also highlighted the work done by the Foundation.

Murray and his colleagues remain open to discussions with any other groups interested in buying Hearts, and have always insisted that their primary aim is to get the club back on its feet, not to gain power for themselves.

Murray has been in touch with three other potential bidders over the past few weeks, two of them in the last 48 hours. All had previously made their interest in buying Hearts known, but Murray is not convinced any of them has the resources to do so on their own.

The group of Scandinavians who first publicised their interest several months ago have not contacted the MP since missing an appointment early last week. Another group with US connections is interested but, while they have indicated they would be willing to work with the Foundation, Murray has no evidence that their plans would be along the lines that his organisation could accept.

The group fronted by Gordon McKie has a real interest in taking control of Hearts, but the prospects of collaboration appear to have cooled since Murray had preliminary talks with the former Scottish Rugby Union chief executive last week as no formal approach has been made to the Foundation.

Taken from the Scotsman