Ashley Drops Newcastle Price To £300m

Mike Ashley is believed to have cut the asking price for Newcastle United from £480m to in the region of £300m – a move that has brought about interest from around six potential investors according to media speculation.

Having paid £133m for the club and paid off its loans, a price of £300m would still leave the Newcastle owner with a profit of £50m from any sale.

Ashley only took charge of Newcastle last year but decided to sell after vociferous fan protests following the resignation of manager Kevin Keegan.

As many as six potential bidders are thought to have received a consultation document from Seymour Pierce, the investment bank hired by Ashley to undertake the sale.

It is not clear whether the Nigerian consortium which publicly expressed an interest in the club earlier this week is amongst those investors approached by the bank.

There are a number of financial and legislative hurdles before any sale can be confirmed and, with banks unable to fund significant loans in the current economic market, any investor must prove that they have the necessary funds for the takeover upfront.

Despite the club’s current plight, being second-bottom of the Premier League, Newcastle could still be an attractive investment opportunity.

The club has little debt to speak of and owns its own stadium – St James’ Park holds 52,000 fans, with 35,000 of them season-ticket holders, and is currently valued at around £150m.

The playing squad is worth around £100m and has a wage bill of £70m, which is by no means the largest in the Premier League.