‘Highest’ bidders and ‘best' bidders – The sale of Sheffield Wednesday draws closer
Sheffield Wednesday remain up for sale, with a handful of interested parties still in the mix as the end of the season draws closer.
Wednesday are in a difficult place at present. They’re rock bottom of the Championship on -7 points, heading for League One, and have no proper assets to their name on the back of the financial mismanagement of Dejphon Chansiri. Their consistently impressive fanbase is their biggest plus point, and they don’t really have a monetary value.
It was reported by The Star last week that progress was being made with regards to the sale of the club, with the likes of Mike Ashley, David Storch and a ‘mystery bidder’ believed to still be keen on getting a deal done. It’s understood that – of those who have made offers – nobody has been ruled in or out at this stage. That gives hope that a deal could be done in the not-so-distant future, with hope of a preferred bidder being named this week. As always, however, all timelines are subject to change.
Does the highest bid have to be accepted?
One key element surrounding the bidding process is that of the highest and/or best bidders. The administrators, Begbies Traynor, are the ones who are tasked with finding the best deal for the creditors, but that doesn’t mean that they necessarily have to accept the highest bid.
An expert in this field has explained to this publication that it is more accurate to describe the winning bid as being the ‘best’ rather than the ‘biggest’, with several factors being taken into consideration on that front.
Around £10m is required in order to pay the money owed to New Avenue Project Ltd (£7.5m) and football creditors (£2.6m) in order to keep ownership of Hillsborough Stadium and obtain the ‘Golden Share’ from the English Football League – two vital elements of the purchase. Another £3.9m is set to be paid as the administrators’ fees.
Above that ±£15m, a chunk of any fee paid would go into the pocket of Chansiri and other non-football creditors. It’s been suggested that nobody – as things stand – is willing to pay the 25p on the £ that would avoid a 15-point deduction, and if peace has been made with that punishment then the business argument is simple… Why pay more?
Probably the only reason to pay more is as part of an attempt to win the bid, but again – it’s not that simple. As explained to The Star, factors such as the structuring off the offer, the amount of money available for the immediate future, and the speed at which EFL Owners' and Directors' Test can be passed are all considered.
For example, with the club effectively spending £1m a month as things stand, a lengthier waiting period for EFL approval may not be seen as the right move. The same could be said for naming a preferred bidder who would offer £5m more than a rival but pay it in numerous monthly instalments rather than up front. Neither of these examples are put forward to insinuate, in any way, the presence of a clear frontrunner at this point.
But these are all things are being taken into account as Begbies Traynor look to try and finalise the sale of the club, with care being taken to make sure there is no repeat of the situation that saw James Bord’s consortium come and go.
As previously mentioned, there is hope that there could be a preferred bidder named by the end of the week. But that doesn’t mean it’ll go straight into the hands of whoever bids the most.