Posted on 01/03/2019
CHAPTER 4 Why won’t you sell the club, Norman?
But there’s no alternative …………. Really?
The news today that a further bid from Synectics Solutions has been turned down by Norman Smurthwaite shows that there are clear alternatives to him as owner of Port Vale but the incumbent is simply being completely unrealistic in his demands. Why?
Mr Smurthwaite has claimed on a number of occasions that he has been pouring huge amounts of cash into the club to keep it on an even keel. He has now told supporters that he has no intention of subsidising the club any further. In Chapter 3 we asked why he had found it necessary to make such a huge director’s loan. We now ask, if it has cost you as much money as you claim, Norman, and you no longer have any interest in being involved in the running of the club, why on earth do you not simply offload it to reduce the drain on your £130 million fortune? Why won’t you sell at a sensible price?
• Since Mr Smurthwaite became sole owner of Port Vale Football Club he has reportedly received offers form four separate prospective buyers for the club. This fact alone refutes the claims made by his followers that there is no one else out there. So let’s look at the facts and see who these prospective buyers were.
• In late 2015 Mr Smurthwaite was in discussions with a Hedge Fund based in Boston, USA. He reported that this group had raised £7 million which was his agreed price for the club. The group wanted him to stay on to run the club until June 2017. In early 2016 the Club Secretary brought Synectics Solutions to the table (more of this in a moment) so the Boston group was put on the back burner. When the Synectics deal fell through, Mr Smurthwaite returned to the Americans, who were rather angry at this point. They had raised a further £3 million from investors to cover running costs once the takeover of the club was complete.
• Nothing came of this relationship in the short term but a year later the Boston group re-emerged. Mr Smurthwaite stated that they had paid a £50,000 exclusivity payment which expired on 30 April 2017. In early May 2017 he reported that the exclusivity period had been extended for a further two months with another £50,000 having been paid. This made a total of £100,000 in exclusivity payments which would come off the agreed purchase price for the club - £3.7 million without the stadium. Mr Smurthwaite later publicly denied all this in a Supporters’ Club meeting in March 2018. Nothing has been heard of the Bostonians since then.
• Local IT company and Vale neighbours Synectics Solutions entered into negotiations to purchase the club in early 2016. The negotiations progressed well and a deal was agreed in principle. Synectics Solutions were then made aware of a possible issue over the disputed ownership of the area around the club shop. Consequently, they sought to renegotiate the deal. Mr Smurthwaite refused and announced that he wasn’t selling because Synectics did not have the finance and were attempting to buy the club with borrowed money. This was simply untrue.
• On 5 May 2017 Synectics confirmed that they had made a second offer to buy the club for £1.25 million – the price which Mr Smurthwaite had paid when he bought the club and ground out of administration in a much healthier state. Carol Shanahan, the Managing Director of Synectics, said, “We have already developed connections with a team of experts to support us should we be successful.” It was exactly at this point that the Bostonians re-emerged as potential bidders as described above!
• Synectics initial offer was rejected, as was a further offer which the owner claimed “could have had serious financial implications going forward for Port Vale.” In a statement Synectics said, "Our initial offer of £1.25m was based on the information we had at that time. Subsequently, Norman informed us that there were potential, additional short-term revenues which would increase the value of the club. In the light of this information, we increased our offer subject to full disclosure prior to any deal being agreed. This increased offer did not impact our funding plans for running the club. It would not have caused serious financial implications as alleged. We are incredibly disappointed that we were unable to reach an agreement at this time. However, we remain as keen as ever to buy the club should the opportunity arise in the future."
• Since then, Carol Shanahan has shown her commitment to Port Vale and the local community by becoming Chair of the Port Vale Foundation, playing a significant role in the development and success of the organisation.
• Mr Smurthwaite has said on more than one occasion that he believes Synectics would be the best owners of the club yet the IT company has today announced that they have made a further bid for the club which has again been rejected. Their interest in the club has continued since their initial offer and there has been ongoing if intermittent communication with the owner.
• The detail of the bid suggests that the owner would achieve his reported aim of getting his money back. His response, implying that the payment terms offered were akin to a mortgage, was bizarre bearing in mind that such terms were offered at his suggestion. Yet again he rejects it and announces he will be out of the country for ten days, conveniently missing not only tomorrow’s crucial game at Notts County but also the next two home games. In local parlance, he is playing silly buggers with our football club.
• When Synectics made their previous offer a matched bid of £1.25 million was submitted by Kevin Jones, owner of Manorshop and a key sponsor of the football club. In a statement on the club website following these two bids Mr Smurthwaite said he “did not anticipate any further dialogue with either party with regard to the sale.”
• Finally, we turn to the Norwegian consortium. At the beginning of March 2017 Mr Smurthwaite contacted three supporters by email to seek their views on a bid to buy the club which had come from a Norwegian investment group. Attached to the email were a series of documents. One of these was the investment brochure from the group organiser, Rodinia Sport AS. In addition there was detailed financial information for the investment group which had clearly been attached to the email in error. These included a number of pages from various PVFC bank accounts and detailed information about the salaries of playing and non-playing staff at the club.
• The investment brochure was highly imaginative. The stadium was valued at £10 million, the Vale pub at £2.5 million and the playing staff at £5 million – remember this was the squad that was in the process of seeing us relegated to League 2. It was reported that the group had paid a £50,000 exclusivity fee for access to the club’s books.
• Details of the Norwegians’ interest made it into the local press. The owner then issued a statement via the club website on 6 March 2017 in which he confirmed the interest of all the parties listed above. He also criticised the fans to whom he had released the information about the bid for not having the courtesy to reply to him despite the fact that they had! The statement mentioned that initial contact with the Norwegians had been made in June 2016 – around the time the owner was beginning his project of bringing in players to the club via the European version of the Argos catalogue. Some details in the investment brochure hint at clear links between this project and the proposed bid. Mr Smurthwaite also said that the Norwegians withdrew their interest initially following a serious disagreement with Bruno Ribeiro and only renewed their interest following his departure in December 2016.
• We have chosen not to refer in detail to Mr Smurthwaite’s latest prospective deal with businessmen in Hong Kong as there is nothing in the public domain about this other than the fact of its existence.
• To those who say there is no alternative to the current owner, it is clear that we have had both local and international bids for the football club, all of which have been rejected. Those bids have produced exclusivity payments of £200,000 although it is unclear whether these have been paid to the club or the sole shareholder of the company. Mr Smurthwaite himself has said on more than one occasion that Synectics Solutions would be the best owners for the club yet he has rejected a number of offers from them including their latest effort to prize the club out of the hands of a man who has no interest in it at all other than the kudos its ownership gives him.
So our final question to Mr Smurthwaite:
You claim to have lost money
You say you no longer want to be involved in the club
You have had numerous offers for the club which will cover the cost of your purchase and investment
You say your neighbours will be the best owners
Why don’t you just sell to them at the price offered and give us all a break?