Watford confirms talks on takeover

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Watford, the Championship football club controlled by Conservative peer Lord Ashcroft, has confirmed it is in the early stages of takeover talks with an unidentified suitor.

Watford Leisure, the holding company of the lossmaking football club, said unspecified media speculation had prompted the stock exchange announcement on Friday that Lord Ashcroft was in talks over a sale, which would require a full takeover offer for the company.

The statement follows days of web-based speculation among Hornets’ fans that the club could be sold to new investors, with speculation over the identity of its new potential owner ranging from an Italian to a Russian or Indian consortium.

Lord Ashcroft owns 37 per cent of the company’s shares and is owed another £6.5m in loans, after extending funds to the club and helping rescue it from the threat of administration last December after the resolution of boardroom rows.

Other significant shareholders are Valley Grown Salads, the investment vehicle of former chairman Jimmy Russo and his brother Vince, and former chairman Graham Simpson. Non-executive director David Fransen, who helped stabilise club finances with loans of £2m during the year, is the other major interested party in the club.

Watford is best known for reaching an FA Cup final and finishing second in the English top flight during the 1980s while owned by singer-songwriter Sir Elton John who remains honorary life president and when managed by current chairman Graham Taylor.

Attempts to stem losses at the club were hampered by loss of media income, which fell by £10.4m following the withdrawal of parachute payments from the Premier League from which Watford was relegated in 2007.

A concert by Sir Elton in the summer raised £1.35m though losses widened from £2m to £4m as revenues fell from £23m to £11m in the year to June as Watford finished 16th in the Championship.

Last December Fordwat, Lord Ashcroft’s investment vehicle, paid off a £4.9m loan that Watford owed to Valley Grown Salads.

Shares in Watford Leisure closed up 2½p at 9½p on Friday, valuing its equity at £4m.

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