Hearts administration: Fans fight on for club

Fans at Tynecastle face a tense wait. Picture: PA

Fans at Tynecastle face a tense wait. Picture: PA

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UNBOWED Hearts fans are refusing to cash in their chips as rival consortia enter a tense phase of high-stakes poker that will determine the club’s future.

It appeared a maroon-tinged house of cards was collapsing yesterday after administrators batted away three formal bids for the Tynecastle outfit amid talk that only a steep price hike would stave off liquidation.

• Hearts crisis: Your questions answered

Hearts administrator Bryan Jackson was forced to warn that his Lithuanian counterpart had made clear winding up the club was a possibility unless bids were significantly increased.

Negotiations continue, but with a buid by local businessman Bob Jamieson, backed by US Club 9 Sports, out of the running, fan-led consortium Foundation of Hearts – which confirmed it would make an improved offer – is now facing a showdown with Five Stars Football Limited – which lists controversial former Livingston owner Angelo Massone among its directors – for the ultimate pot: the reins of Heart of Midlothian FC.

Hearts have been in administration since June 19 with debts totalling £25 million to companies formerly owned by Vladimir Romanov that are also facing insolvency crises.

Hearts stalwarts urged calm today, claiming the rejection of initial ownership bids was simple posturing to achieve the best possible price for Lithuanian creditors.

Former chairman George Foulkes said the blanket brush-off was akin to “horse trading” and warned that driving the club to extinction was a dysfunctional financial gamble.

He said: “I’m a big fan of Dad’s Army and as Lance-
Corporal Jones would say ‘Don’t panic!’. We are not at the stage of Private Fraser’s ‘We’re doomed’ and in my view this is all part of normal negotiating procedure.

“It’s the Foundation and the Massone bid which the Lithuanian administrators are using to try to get as much as they can out of the administration process. Now is the time for more people to come in and back the Foundation of Hearts.

“If there is a gap between what the Lithuanian administrator wants and what’s been offered, the Foundation will be more able to bridge that gap if more people get involved.”

He added: “The one thing the administrators have to realise is that if the club goes into liquidation they won’t get more, they will get less.

“The only people who can make profitable use of the asset is the football club. It’s not like the old situation [in 2004] when Cala Homes were willing to pay a huge amount of money to build flats.

“The property market has collapsed and the number of empty properties in Edinburgh enormous. There is an availability of land, particularly around Fountainbridge where you can find acres and acres of empty space, so liquidation will be a fire sale and is going to make less. They are better selling it as a going concern.”

Iain Mercer, the son of former chairman Wallace Mercer, said the Gorgie club had been living under the threat of liquidation for most of the season and remained optimistic it would survive.

He said: “I don’t think the club is in a more perilous position today that it was yesterday. The Lithuanian administrators were always going to come back and say ‘it’s not enough’.

“As soon as the word liquidation is mentioned people sit up and think that’s a bad state of affairs, but that is always a possibility when a business is in administration. People just need to keep calm.

“I think this is part of an ongoing process and certainly don’t think it’s time to panic. This reaffirms that, at the moment, the Foundation of Hearts is the only clear bid that is credible and needs supported.

“There was 7000 season tickets sold which has enabled the administrators to at least get us to the start of the season and gives the club more than a fighting chance of being able to get over this latest hurdle.”

In the last 12 months, the club has weathered a financial storm amid winding-up orders for unpaid tax and widespread fan fundraising to ensure it could meet its bills.

On June 14, the News told how Hearts’ owners had to find £500,000 to survive until August just days before it entered administration.

Councillor Steve Cardownie, deputy leader of the city council and a Hearts season ticket holder, said he expected bidders to revise their submission and re-enter the race.

“The bids can still be improved and this might well be part of the process,” he said. “I suppose reading the press details of the bids it hasn’t come as a great surprise that none of them have, at the moment, met the valuation made by the administrators.

“However, the door has not been shut and given the three bids were made independently of each other, it may be that they have been a little conservative in their bid and there may be some flexibility.

“It looks to me that this is the first pronouncement of the administrators of the quality of the bids concerned and I’m still optimistic that the matter will be resolved and that Hearts will be a going concern and fulfil our fixtures.”

He added: “At the moment I’m not panicking because I think we might just be going through the initial skirmishes of the process and hopefully anybody that has an interest in Hearts will take cognisance of what the administrator has said and be able to address it.”

Another season ticker holder, Gary Wood, 24, has sat in Section G at Tynecastle for the last four seasons – and elsewhere before that.

The Jambos diehard, who names his favourite player as Paul Hartley, said in Foundation of Hearts, led by Ian Murray MP, fans now had a transparent body to plough life-giving funds into.

“Supporters were blindly putting money in before but there’s a clear vision of where the money is going now,” he said. “We were previously putting money into a black hole but Ian Murray has shown what we as fans can get for it and ultimately it’s going to be the club.

“The news yesterday was concerning but the more you think about it, it’s unsurprising. Administrators were unlikely to accept the first offer but the threatening language that was used was surprising. Throwing words like liquidation around could mean they are they wanting to create urgency, or it could be that they are trying to prepare us for the worst.

“What’s giving Hearts fans some hope is that we can’t see any benefit for them putting us into liquidation.”

Mr Murray, who took over the helm in April, said it was “business as usual” amid speculation the group would return with an increased bid.

He said: “The bid team are meeting with Hearts administrators BDO this week and we will go into those discussions and make decisions beyond there. We have the most affordable bid that’s in the best interests of the future of the football club which might not be the same goals as the administrator, but we have to find some way of negotiating our way through that.”

‘Not a lot has changed’

AS the news broke, Hearts fans took to Twitter to voice their concern.

Paul O’Neil, @pauloneil1874: “Never good when you hear the word liquidation, but in reality not a lot has changed. First bids rejected but room to negotiate. Now up to interested parties to get serious, have a feeling the initial bids were to get a feel of Ukio’s valuation.”

Alan Meikle, @AlanMeikle: “Do folk seriously not realise that liquidation has been a threat to Hearts since 19 June? Why get their knickers in a twist today?”

Derek Gaston, @dgaston_1: “Hearts are facing fear of liquidation after three takeover bids rejected. Need improved offers. Not looking good!! #needhelpfast”

Parody account Vladimir Romanov, @TheReal_Romanov: “Remember if you liquidate Hearts you don’t get the money for the shares or a deal for the debt! Slavering fools! FoH have the money trust me.”

Craig Wilson, @Real_C_Wilson: “If your reading this tweet and call yourself a Hearts fan, but haven’t pledged to FoH (Foundation of Hearts), now is the time. Save your club.”

HMFC LIMITED OUT OF THE RUNNING

A £1.8 million bid from HMFC Limited is understood to have been flatly rejected by Lithuanian administrators. It is now thought to be out of the running in the ownership battle.

The consortium, controlled by Edinburgh businessman Bob Jamieson and financed by American-based sports management

firm Club 9 Sports, was said to have amassed £3.2m in working capital for the next three years.

FOUNDATION WILL BE BACK

Foundation of Hearts is understood to have increased an initial £2 million bid to £3m last week, but despite demonstrating a working capital of £3.75m failed to break the resolve of the Lithuanian administrators. It is now locked in a head-to-head contest with the only other remaining bidder. It represents all the major fan groups with the stated aim of creating a fan-led club. The group will return with a new offer.

NO PROVISION FOR WORKING CAPITAL

Former Livingston owner Angelo Massone is listed as a director with Five Stars Football Limited, whose £4 million offer was also turned down. Alongside FOH, it is the only contender left in the battle for Hearts. Its bid did not include any provision for working capital to meet Hearts’ £2m funding cap this season.