Carlisle United to seek new investors after long-running takeover attempt collapses

Carlisle United are to seek “credible new potential investors with immediate effect” after the collapse of a long-running takeover collapsed.

The League Two club have been dealing with a £2.1m debt to Edinburgh Woollen Mill which was “provided at a time when the club was going through particular financial hardship and the intention was to ensure that the club had a sound financial footing for the future”.

The club are currently controlled by local businessmen Andrew Jenkins, Steven Pattison and John Nixon.

READ MORE: Manchester Giants partner with Enterprise City in bid to join Europe’s elite

By the middle of 2019 a majority of the existing shareholders proposed to transfer their shares, a move which also included a restructure of the share capital of the club and a dilution of CUOSC voting rights.

The deal would have led to an immediate change of control and required normal EFL approval before it could progress. That process with the EFL began in the summer of 2019.

However, in December 2019, following discussions with the EFL regarding the change of control provisions, the club said attempts were made to mutually agree on a way forward, with a revised deal, that would eventually have led to a change of control at some time in the future, with EFL approval required at that point in time.

At the time, CUOSC made it clear that the revised deal would not be acceptable.

As no agreement was completed, the legal responsibility and control of the club remained with the existing shareholders, as it still does today.

Don’t miss a thing – sign up for your free North West newsletter – and follow us on LinkedIn

Email newsletters

BusinessLive is your home for business news from around the North West- and you can stay in touch with all the latest news from Greater Manchester, Liverpool City Region, Cheshire, Lancashire and Cumbria through our email alerts.

You can sign up to receive daily morning news bulletins from every region we cover and to weekly email bulletins covering key economic sectors from manufacturing to technology and enterprise. And we’ll send out breaking news alerts for any stories we think you can’t miss.

Visit our email preference centre to sign up to all the latest news from BusinessLive.

LinkedIn

For all the latest stories, views, polls and more – and the news as it breaks – follow our BusinessLive North West LinkedIn page here.

Edinburgh Woollen Mill went into administration following the outbreak of the Covid-19 pandemic and was then packaged into Purepay Retail alongside Bonmarche and Ponden Home.

In the middle of this year, CUOSC officially withdrew its support for the deal, “citing that the original agreement had not been completed, that it was now in their view out of time, that the proposed revised deal was not acceptable and, given events at other football clubs in the EFL since late 2019, alternative investment was required”, the club said.

A CUFC Holdings Board statement said: “We know some fans may be angry and upset that this takeover has not been achieved after we have tried for so long to make it happen.

“We too felt a deal was achieved in June 2019, subject to EFL approval, so we are all deeply disappointed to have reached this point.

“The Holdings Board are sincerely appreciative of EWM, Purepay Retail and those connected to them over the last few years for their continued financial and corporate support, to which the shareholders and the club are and will always be profoundly grateful.

“The board has also entered into discussions with Purepay Retail over the repayment of the loan facility.

“The board, and all parties involved, gave this deal all the time we possibly could, and more. It had a local fit with a large established company which had strong connections with the club.

“We have persevered and waited patiently in the face of growing fan anger, but it has still not been possible to complete the takeover. We must now move on and look to the future.

“We have met Keith Millen a number of times since his appointment as manager, to ensure he has all the support he needs.

“On Monday we discussed the events of Saturday and he discussed his thoughts and concerns. We reiterated our commitment to Keith to make available whatever finance is needed to help him move the team up the league and out of the relegation zone.

“Financially, the club is secure, and funds are in place ready for what is required to move us forward.

“We hope, after this news is digested, the fans will continue to support Keith and the team in the remaining matches.”

Business Live – North West