VLADIMIR ROMANOV’S answer when asked if he wants to sell Hearts and what his price would be: “You know, I was waiting more than seven years to get a bank licence in the UK. Now I’m considering what to do in the future (with Hearts).
I watched for seven years how the football mafia is working. In the banking system, I’m looking at how bank cartels are working. It’s a shame. Such a huge and nice country has such potential but it’s under huge influence in this system.”
I asked the Russian the above question whilst interviewing him in Liverpool following Hearts’ Europa League play-off tie at Anfield in late August. His reply told me very little, other than he still has issues over who to trust in Scottish football. Nothing wrong with that in itself.
The time has come, though, for Romanov to state clearly what he wants for Hearts and begin proper negotiations with those interested in taking control of the club. Four takeover bids have now been rejected by the Russian businessman. Alex Mackie and Foundation of Hearts have been rebuffed three times, whilst Angelo Masson’s £4.5 million offer was rejected on Monday. No-one is saying Romanov should simply hand over his majority shareholding for no return, but he must state his conditions of sale in order to move forward. For the fans’ sake as well as his own. The uncertainty is not good for business.
Foundation of Hearts first approached Romanov, through his associate and Hearts director Sergejus Fedotovas, around 18 months ago.
They wanted to acquire his majority shareholding for free and convert Hearts’ £24m debt into a long-term loan. The answer was no. They returned with an offer to buy Tynecastle Stadium from Romanov for £15m and lease it back to Hearts in return for ownership. Again they were dismissed.
Their latest offer of £450,000 to pay off a tax bill and take full control of a debt and liability-free Hearts was certainly ambitious. It was no surprise when that bid was also knocked back. Massone, the former Livingston owner, proposed a £4.5m takeover if Romanov took care of debt and liabilities. That was rejected. Yet Romanov has not put any counter-offer to either Foundation of Hearts or Massone. He has yet to even meet Mackie in person. His negotiating tactics are baffling at best – something he may well enjoy.
Hearts stress he is willing to negotiate a sale with anyone who is genuinely interested in taking the club forward and who can match his valuation of the club. That has been previously stated as £50m. Yet with ten per cent of the club available through a share issue which will raise £1.79m if fully subscribed, the overall valuation of Hearts as a business is just shy of £18m.
Their biggest asset is Tynecastle, however falling land prices have seen the stadium’s value drop somewhat since Cala Homes were prepared to pay £22m for it in 2004. According to sources in the building industry, Tynecastle in its current state would be worth roughly £9m-£10m. Were it purchased purely for land value – that is to be demolished and replaced by homes or other commercial development – it could be worth as little as around £6m.
Romanov will certainly be aware of all these issues. He didn’t earn millions in the banking industry by being naive. Yet his Ukio Bankas Investment Group are growing tired of Hearts and now want the Edinburgh club off their portfolio of businesses. Romanov and his associates must plot an exit strategy, which involves communicating with prospective buyers.
The Russian businessman has done many good things since taking control of Hearts over seven years ago. He kept them at Tynecastle by cancelling the Cala deal, brought in top European players, funded two Scottish Cup wins, a place in the Champions League qualifying rounds and three Europa League qualifications. Although his careless spending on average players saw debt shoot up, he brought it down again through debt-for-equity swaps and some astute bargaining in player transfers.
Now he must face up to a crucial time in his tenure. The time when he must step aside. Hearts are being pursued by tax authorities, players are deferring wages and fans are raising enormous funds like £600,000 through the share issue. It is all being done to keep the club alive until the end of the season. Any businessman would be keen to tap into that potential for growth.
So Vladimir Romanov, what price do you want to sell Hearts for?