Everton 'must accept reality' as 22 November deadline critical to Dan Friedkin takeover looms - Kieran Maguire
Today at 01:05 PM
Dan Friedkin is potentially just weeks away from taking over Everton – but the deal is not signed and sealed just yet.
As well as the Premier League’s Owners’ and Directors’ Test and Financial Conduct Authority checks, there are still several problems that need to be resolved before he can succeed Farhad Moshiri.
Friedkin – or, more accurately The Friedkin Group – are expected to breeze through the regulatory checks but other issues could present more of an obstacle.
For one, there is the now infamous Leadenhall case.
Leadenhall, a London-headquartered firm, have filed an injunction that prevents Everton from being able to settle a debt with A-Cap, the company who took over a £200m loan to the club from 777 Partners.
The case itself is between Leadenhall and A-Cap and in no way implicates Everton, but the situation does demand a resolution before the Toffees takeover can go through.
The latest filings suggest that may not happen until March in a worst-case scenario.
In other news, the Premier League civil war over its rules governing associated party transactions (APTs) could also prove problematic, or at least add to the complexity of the takeover.
Everton takeover: The soft loans issue
Earlier this year, Everton gave evidence in support of Man City in their challenge to the Premier League’s APT rules.
The APT rules were introduced after the Newcastle takeover in 2021 and are designed to stop clubs from using artificially inflated commercial deals to boost their Profit and Sustainability Rules (PSR) position.
Everton’s issues with PSR yielded two separate points deductions last season, and their relationship with the Premier League – who spent £45m on legal fees in 2023-24 alone – is at breaking point.
Incidentally, the Merseysiders’ PSR drama might not be over. Everton face another PSR hearing later this year relating to their 2021-22 spending that could theoretically lead to another sporting sanction.
The Everton situation has contributed to a wider malaise within the Premier League regarding its spending rules, which saw its member clubs divided over the APT issue.
Significantly for Everton, one outcome of the case is that interest-free loans from shareholders will likely be treated as a form of subsidy going forward, with a commercial interest rate applied for PSR purposes.
No one has more soft loans in the Premier League than Everton, with Moshiri having lent the club £451m since 2016.
How might this affect the takeover? According to Liverpool University football finance lecturer Kieran Maguire, Moshiri may need to cut his losses and accept he will never see a penny back from the loans.
“It’s interesting that Moshiri has lent the club some money that, if you go into the small print of the club’s balance sheet, is being treated as equity already,” he told TBR Football.
“Given that the club will never realistically be in a position to be able to repay Moshiri, sometimes you just have to accept reality and make it a formal conversion.
How the APT case could impact Everton Shareholder Association
Friedkin’s deal to take over from Moshiri is for just over 94 per cent of the club’s shares.
The bulk of the remaining shares are, in fact, owned by the Everton Shareholder Association, a group primarily made up of supporters.
If Moshiri was to convert his shares into equity, it would dilute the Shareholder Association’s stake.
The answer, says Maguire would be to: “Convert it into a special type of share that has no voting rights.
“That would protect the interests of the other six per cent of other shareholders.
“Most of those other shareholders are fans, passionate fans as most Evertonians are. They want what is best for the club and I think it’s always good to have that dynamic within a shareholder group.
“It would be hard for them to have their shareholdings further diluted simply to appease the APT position. That would be very harsh.”
