How do Sainsbury's view the latest events?

[CC51DAS]

The deal was done, but it was conditional - this will almost certainly relate to planning permission, but could include other conditions such as securing vacant possession of the whole site, and possibly stuff relating to Fossetts being ready.

There will however be a long-stop date on how long the parties have got to meet all the conditions. If conditions aren't met, the party benefiting from that clause can waive it - ie if RM had insisted on a clause saying nothing can happen until a new stadium is built, he can say to Sainsburys, forget about that bit. If you want to move in now you can do so.

Even when all conditions are met, things won't happen immediately, as Sainsburys are likely to require a minimum amount of time to stump up the cash (even they won't have a spare £10m lying down the back of the sofa/in petty cash) and will want time to arrange for their contractors to come on site etc.

There is a lot of suppositon in these posts and I certainly accept that I am out of my depth here - so RM would be right in thinking that this would go over at least one head. That said I would very much like to understand the situation, which to me seems central to the club's future, better, if not fully.

One thing I imagine I would be correct to think though, is that for a deal to be cut, the price, ie the value of RH, would have been agreed at the outset, albeit subject to various conditions, time frames etc.

So- firstly, that would appear to discount the thought I had that possibly Sainsbury's payment of the £2.1m was made to block any competitor getting in on the act (some were suggesting at the time that we were not tied to Sainsbury's and RM would go to the highest bidder) and secondly it makes me wonder what RM was on about when, iirc, he commented that HMRC had forced him into a difficult position in his negotiations which had had to be carried out very hurriedly.

Perhaps someone could ask RM exactly what he meant by this and exactly where we stand now.

 

[CC51DAS]

I should perhaps add that my main concern is that despite all the assurances and covenants etc, Sainsbury's will be able to find a way to build on RH, leaving the club groundless and the future for the club very uncertain.

 

[Hotman]

Unfortunately I still have the feeling that it is in both Sainsbury's and Ron Martin's interests for SUFC to be liquidated - end result: prime location for Sainsburys, and retail development without a loss making club to subsidise.

 

[Firestorm]

Unfortunately I still have the feeling that it is in both Sainsbury's and Ron Martin's interests for SUFC to be liquidated - end result: prime location for Sainsburys, and retail development without a loss making club to subsidise.

I can see your point, but why not do that at the time of the last (2.1M) issue, I wonder if revised PP for Fossets would go through without the stadium though ?

 

[Hotman]

That's what I'm trying to get my head around.

PP - I'd be almost certain it would go through provided that contracts were in place with retailers, purely for the employment boost to the area.

My question is about the 2.1m, perhaps the winding up order at the time was holding up SBC's consent that has just been achieved, so worthwhile Sainsburys putting that money in?

all speculation of course...

 

[ms brush]

Unfortunately I still have the feeling that it is in both Sainsbury's and Ron Martin's interests for SUFC to be liquidated - end result: prime location for Sainsburys, and retail development without a loss making club to subsidise.

I have a tendency to agree on some levels, because that is how it looks on the surface, but if that is the case then why did we pay the £2.1m to HMRC last year, and fight the second winding up order this time round?? If it is really in RM's and Sainsbury's interests, wouldnt it have made more sense to have allowed HMRC to close us down??

I suspect, that as in a lot of business deals there are several layers of complexity and complication that anyone outside the negotiations are not party to and are considered confidential so dont get discussed with wider stakeholder groups (in this case, us, the supporters).

Commercially, Sainsbury's buying Roots Hall is all about its location and captive audience from local residents, not about killing off the club, and Ron Martin (and consequently SUFC) needing Fossetts to come off to survive. It looks like the deal has been ongoing formally for 2-3 years at least, and maybe for a couple of years prior to this as well. However, the credit crunch hasnt helped because funding for major building schemes is harder to come by, but as land prices have also fallen, this is still a viable prospect for both sides. It could be that RM is trying to get Sainsburys to underwrite the development of FF as well as develop the Roots Hall site. That would make more sense and explain some of the delays and lack of openness that has been going on.

RM would be committing suicide commercially if FF doesnt get built, because it seems he is playing a financial game of highly charged russian roulette. As well as that, he wont want 6000 angry Southend fans camping out at (or setting fire to) his posh house in Benfleet Road...

 

[CC51DAS]

I have a tendency to agree on some levels, because that is how it looks on the surface, but if that is the case then why did we pay the £2.1m to HMRC last year, and fight the second winding up order this time round?? If it is really in RM's and Sainsbury's interests, wouldnt it have made more sense to have allowed HMRC to close us down??

Yes, agreed. But what if in November Sainsbury's (or their advisors who presumably did the due diligence), screwed up ? Maybe RM was able to convince them he had the dosh to do the development of FF on which the supermarket supposedly depends and now he finds he doesn't.

Alternatively they believed all along that there was a good possibility that they would get to develop RH if the club was to go under. They have to keep fighting the WUO, for the sake of appearances. And if it were not for the intervention of the Consortium, would RM have got away with paying the £2.1 (a la Bates) and taken the ten point deduction that Administration would have cost us, in the belief that this squad , which is 'too good to go down' would still have avoided relegation ?

I suspect, that as in a lot of business deals there are several layers of complexity and complication that anyone outside the negotiations are not party to and are considered confidential so dont get discussed with wider stakeholder groups (in this case, us, the supporters).

Agreed - can well imagine much of this is confidential - but given how this has nearly caused the demise of the club its time to enlighten us.

Commercially, Sainsbury's buying Roots Hall is all about its location and captive audience from local residents, not about killing off the club, and Ron Martin (and consequently SUFC) needing Fossetts to come off to survive. It looks like the deal has been ongoing formally for 2-3 years at least, and maybe for a couple of years prior to this as well. However, the credit crunch hasnt helped because funding for major building schemes is harder to come by, but as land prices have also fallen, this is still a viable prospect for both sides. It could be that RM is trying to get Sainsburys to underwrite the development of FF as well as develop the Roots Hall site. That would make more sense and explain some of the delays and lack of openness that has been going on.

Yes that would make some sense of RM's comments, if true. Maybe he would like to comment tomorrow night.

RM would be committing suicide commercially if FF doesnt get built, because it seems he is playing a financial game of highly charged russian roulette. As well as that, he wont want 6000 angry Southend fans camping out at (or setting fire to) his posh house in Benfleet Road...

Indeed, I have heard that most missile attacks result in a fire :)

 

[Yorkshire Blue]

As I told you before, the decision on whether Sainsburys lent the money will have been decided by whether they thought RM had the assets to pay Sainsburys back, not whether he had the means to complete the development.