Everton have confirmed 777 Partners’ proposed takeover has fallen through following the expiry of the purchase agreement.
The Miami-based group’s deadline to complete the acquisition of Farhad Moshiri’s majority stake passed at 5am (BST) on Saturday, with the Anglo-Iranian businessman not minded to grant another extension.
The club are now free to talk to other investors and say they will “assess all options for the club’s future ownership.”
Everton’s majority shareholder Moshiri, through company Blue Heaven Holdings Limited, reached an agreement with 777 for the sale of his 94.1 per cent stake in September, and the transaction was expected to be completed by the end of 2023. However, the takeover has continued to be delayed due to 777’s inability to meet all the conditions outlined by the Premier League to complete their purchase.
A club statement read: “The agreement between 777 Partners and Blue Heaven Holdings Limited for the sale and purchase of the majority shareholding in the club expired today. The club’s board of directors recognises the considerable level of financial support 777 Partners has provided the club over recent months and would like to take this opportunity to thank them for this.
“The club will continue to operate as usual, while it works with Blue Heaven Holdings to assess all options for the club’s future ownership.
“The board of directors would like to thank everyone connected to Everton for their patience over recent months and reiterate its commitment to providing further updates when it is appropriate to do so through the club’s official communication channels.”
Moshiri bought Everton in 2016 but has presided over a slump in performance on and off the pitch. After U.S. investors MSP Sports Capital withdrew from talks about taking a minority stake in the club last August, it was announced in September he had signed an agreement with 777 to sell his shareholding.
However, the takeover has faced persistent delays, with one of the Premier League’s conditions being the repayment of a £160million ($203.8m) loan advanced to the club last April by MSP Sports Capital. In April, 777 was granted an extension by MSP after it asked for more time to source the necessary financing.
In May, the Premier League wrote to Everton and Moshiri, saying it was minded to approve the takeover should certain conditions be met, which included turning their loans to the club, now totalling around £200m ($255m), into equity and a proof of funding for the remainder of Everton’s new stadium project. Those loans, which take the form of junior, unsecured debt were used to cover everyday working capital and new stadium costs.
Last month, Moshiri told the Everton fan advisory board he has received “unsolicited” approaches from other parties interested in buying the club, while interim CEO Colin Chong confirmed Everton had plans in place to pursue “alternative scenarios” should 777’s takeover collapse.
Alternative investors are now expected to come forward. In a recent interview with The Athletic, American businessman John Textor said he was actively looking to sell Eagle Football’s stake in Crystal Palace and was exploring the purchase of alternative English clubs, including Everton.
Everton posted losses of just under £400m ($509.6m) between 2019 and 2023, resulting in two separate breaches of the Premier League’s profitability and sustainability rules (PSR) and the club being deducted eight points in total.
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There will be no tears shed over the collapse of the 777 deal, but attention immediately turns to what comes next for Everton.
Like it or not, there are no easy answers, with Moshiri now forced to go back to the drawing board.
Many have questioned why he persevered with a stalling 777 bid in the face of so many red flags. The terms of the original deal, which would have led to financial penalties had he walked away and saw 777’s loans help with working capital and new stadium payments, created a situation where both he and the Premier League allowed this to rumble on for far too long.
The lag has been damaging; their £200m debt makes it tougher for new investors to do a deal and get Everton back on an even keel.
Exactly what comes next is uncertain. Or, to be more precise: who. Yet the elapse of the agreement at least leaves the club free to pursue alternatives.
There has been interest in Everton, including from Palace shareholder Textor. But this is now a new process where prospective investors will have to agree a deal and then go through the same checks which proved a stumbling block for 777. Textor would also have to sell his stake in Palace — a considerable barrier.
Palace co-owner Textor has interest in buying Everton (Eurasia Sport Images/Getty Images)
Everton’s existing creditors, MSP and Rights and Media Funding, will have a big say. The latter derailed MSP’s own investment last summer, while the former could have assumed majority control in April had they not agreed to extend the repayment date on a £160m loan they advanced to the club a year ago. That date has been extended several times since, suggesting they have little interest in being long-term incumbents.
There is a sense that Everton-supporting businessmen Andy Bell and George Downing, two members of the original MSP consortium looking to invest in Everton, will also be key in finding a solution.
Deloitte has been employed by Moshiri to lead the search but plenty of others are working behind the scenes to safeguard the club’s future.
That should be a source of comfort, but in the interim Everton need to find a way through. They can no longer rely on 777’s loans to help, although sources close to the club and Moshiri say that there is no immediate repayment clause as part of that deal.
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A fresh tranche of broadcast revenues will help, as will healthy season ticket renewals. But Everton head into the summer knowing player sales will also be needed. This is still a club losing money every month and with part of a costly stadium project to fund.
The need for new investment and impetus remains clear — and the sooner the better.
Only then can Everton plot their future with any kind of clarity.
(Joe Prior/Visionhaus via Getty Images)