DIC aims to force Liverpool sale with final offer

The interminable saga surrounding Liverpool's ownership took another twist yesterday when it emerged that Dubai Investment Capital had issued a take-it-or-leave-it £400m bid for the club to the owners, Tom Hicks and George Gillett. The ultimatum was due to expire at midnight last night. Talks between the various parties have been ongoing for some months but there was no sign yesterday of any deal being struck.

So, barring a late-night intervention, DIC will walk away. If only it were that simple. DIC has been pursuing Liverpool for more than a year and is not likely to give up so easily. DIC may cool its offensive, which is a clear attempt to take advantage of the split between Gillett and Hicks, and the pair's unpopularity with Liverpool fans following the owners' dispute with Rafael Benitez. However, it is expected that it would retain an interest with a view to resuming the chase the next time an opportunity appears to present itself.

That may come as soon as May if Liverpool miss out on Champions League qualification. That would create a cashflow problem for the North Americans, if not immediately, then in a year's time when the debt has to be serviced (interest is an estimated £28m a year). Hicks' model – Gillett is increasingly a minor player – is reliant on Champions League income funding the club until the new stadium is up and running, which will take at least three seasons. Failure to qualify might force Hicks to dip into his own pocket for the first time rather than relying on loans guaranteed against club assets. The yawning income gap between the Champions League and Uefa Cup is underlined by last year's European income of Levski Sofia and Seville. Sofia's six ties in the Champions League produced one goal and no points. They received £4.19m in television income and prize-money. Seville, who won the Uefa Cup, earned just £500,000 more.

Hicks, while insisting he will be at Anfield "in five years' time", admitted in January that he had had talks with DIC about the latter taking a stake, between 10 and 15 per cent, in the club. DIC is, however, not interested in being a junior partner, nor is it keen on investing in Hicks' umbrella company, which includes his American holdings in the Texas Rangers baseball franchise and Dallas Stars ice hockey club, and in which he has been trying to place shares recently.

DIC, whose chairman Sameer Al Ansari is a Liverpool fan, having lived in the city, was on the brink of buying Liverpool for around £200m 14 months ago. But negotiations dragged on. Hicks and Gillett took advantage of the impasse. In February last year the pair paid £174.1m for the club, plus £44.8m debt, valuing the club at £218.9m. The deal meant that the chairman, David Moores, earned £8m more than he would have done from DIC's bid, though the club insisted the choice was not made for that reason. It later transpired that all the funding had been borrowed.

In January this year Hicks and Gillett refinanced their deal, taking the club's borrowing to £350m, including £45m in working capital and £60m in start-up cash for the new ground. A £400m sale to DIC would thus realise £50m profit for the North Americans. It is thought that Gillett, who has fewer resources, might be happy to accept that, but Hicks believes, with some validity, that there are far greater riches to be realised once the new stadium is in operation. His deal with Gillett gives him first option on the latter's 50 per cent stake, and approval on how it is divested if he chooses not to buy himself. Lawyers, however, may be able to find a ways round such restrictions and DIC has been talking to Gillett.

The coaching and playing staff are keen for an end to the uncertainty which has cast a shadow over this season and the manager Rafael Benitez's summer plans. However, it is impossible, in the short term, for Hicks to prove he is in for the long haul. Buying out Gillett would at least simplify the issue. The worst-case scenario for Liverpool is for DIC to find a way of buying Gillett's stake, leaving the club with mutually antagonistic co-owners.