An American consortium proposing a takeover of West Ham is preparing an improved offer for the club after its opening bid of £350m was rejected last month.
David Gold and David Sullivan, who bought the club in 2010, have seen their standing with supporters plummet since the move to the London Stadium in 2016 and tensions were further inflamed following Grady Diangana’s £18m sale to West Brom this month.
The relationship between the board and supporters has deteriorated since West Ham left Upton Park, promising that moving to a new home with a 60,000 capacity would help the club to challenge English football’s elite. Gold, Sullivan and Karren Brady, the vice-chair, faced furious protests during a home game against Burnley in 2018 and supporter groups staged anti-board demonstrations this year. The feeling against the trio is strong.
It is understood the would-be buyers, who are involved in US sport, lodged a bid in the first week of August. Their valuation was based on the proposed £300m takeover of Newcastle by a Saudi Arabian consortium, plus an extra £50m because of West Ham’s London location. The offer was rebuffed by Sullivan, who owns a majority shareholding of 51.5%. The 71-year-old does not want to give up control. London Stadium sources question the strength of the group’s interest and pointed out that Premier League clubs receive inquiries on a regular basis.
While the bidders were told in strong terms that West Ham are not for sale, Sullivan did raise the possibility of them buying a minority stake. But the consortium wants to buy the club outright and will only consider a partial sale in return for a controlling interest.
Sullivan is the most powerful figure at West Ham, who narrowly avoided relegation last season. Gold, who owns 35.1%, has far less influence. It is understood that Tripp Smith, an American investor who owns 10% of the club, is not involved in the bid.
A fresh bid is expected in the next month, although one complication is the deal under which West Ham moved to the London Stadium includes an agreement that Sullivan and Gold will have to pay financial penalties to the taxpayer if the club are sold before March 2023. The bidders aim to reach a figure large enough to soften that blow.
West Ham’s finances have been hit by the Covid-19 pandemic. The owners arranged a rights issue to raise £30m during lockdown and David Moyes, the manager, does not have a big budget for new signings during this transfer window.
West Ham, who pay £2.5m a year to rent the London Stadium, made a pre‑tax loss of £28.8m in the last financial year. Their latest accounts said: “The group’s principal risk remains that of the football club being relegated … with the serious financial consequences which follow.”
The accounts also revealed Sullivan and Gold were paid a combined £2.9m in interest in August 2019 on the loans they gave to the club in 2010 and that a further £1m was paid to GGI international, a company related to Gold, in respect of a partial repayment of loan capital. As of 31 May 2019 the combined balance of unsecured loans advanced by Sullivan and Gold amounted to £45m. The highest-paid director at the club was Brady, whose salary rose from £898,000 to £1.136m.
West Ham insisted they took the decision to sell Diangana reluctantly, arguing that the academy graduate’s departure would provide Moyes with funds to strengthen in key areas. Yet there was further unrest when the captain, Mark Noble, tweeted that he was “sad and angry” to see Diangana leave.
There have still been no signings and West Ham, who want the Burnley centre-back James Tarkowski, were poor when they lost 2-0 against Newcastle in their opening league game on Saturday. They are under pressure to bring in new players before the window shuts next month.