Carlisle United's owners announce takeover talks are OFF

Discussions - understood to have involved businessman Philip Day - have been officially shelved by the Blues.

And club bosses have cited the reluctance of supporters' trust CUOSC to agree to a deal as a major reason.

"We have persevered and waited patiently in the face of growing fan anger, but it has still not been possible to complete the takeover," a Holdings board statement said.

"We must now move on and look to the future."

The trust, meanwhile, have issued their own statement confirming they informed the Blues in May that they could not support a deal which did not deliver immediate change of control.

United have said they are in "discussions" over Purepay Retail Limited over the repayment of a seven-figure debt, and are now seeking new investors.

Club bosses said they finally spoke out on the situation to avoid risking "the ongoing uncertainty over investment and ownership" hampering the team's bid to escape relegation trouble in League Two.

They gave their view on why talks, which began with Edinburgh Woollen Mill in recent years, have not now led to takeover.

CUFC Holdings' board consists of chairman Andrew Jenkins, fellow owners John Nixon and Steven Pattison, Purepay's John Jackson, shareholder Lord Clark and CUOSC's Billy Atkinson.

A statement from the Holdings board said: "The initial loan from EWM [in 2017] 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. It was to lead to a deeper involvement from the word go.    

"The relationship progressed and by mid-2019 a majority of the existing shareholders proposed to transfer their shares (at no cost), which also included a restructure of the share capital of the club, and a dilution of CUOSC voting rights. 

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

"In December 2019, following detailed discussions with the EFL regarding the change of control provisions, 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.

"CUOSC made it clear that this 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.

"The Covid-19 pandemic then intervened in March 2020 with the UK entering into a lockdown position. Football stopped, before continuing, but only behind closed doors. As a result of the pandemic our financial backer, EWM, unfortunately went into administration (November 2020). For a period in excess of twelve months everything was on hold, as the pandemic crisis was managed across the UK, until a degree of normality returned.  

"As the UK started to emerge from the Covid pandemic, around Spring 2021, attempts to progress a deal by all parties were once again discussed. In mid-2021 CUOSC officially withdrew their support for the transaction outlined above, 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.

"With the emerging requirements on owners after Bury, and then from the Fan Led Review, covering communication, fan engagement and management, this reinforced its view.  

"Since that time extensive and continuing discussions have taken place. The Holdings Board finally and reluctantly decided the lack of support from CUOSC for a deal meant the other shareholders could not transfer total control of the club to a new investor on the transaction, as proposed.

"The board sought legal advice and it became clear that the best option for all parties was to seek credible new potential investors with immediate effect, to avoid any further detriment to the club.   

"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.

"We will give regular updates as and when there is something substantive to report."

CUOSC, who have a 24.5 per cent stake in the holdings company, responded with their own statement on why they had ultimately not felt able to support a deal.

It said: "CUOSC welcome the news that United are now officially looking for new investment.

"While we will always be grateful to Edinburgh Woollen Mill for their loan facility, which helped the club through some difficult times financially, the club must now move on and seek new investment.

"Initially, we believed EWM’s involvement would lead to a change of control the majority of fans wanted.

"In 2019 we joined talks to try to bring this about but, at the same time, it was made clear to us that if confidentiality was breached it would put any deal at risk. Regretfully, this meant we had to keep supporters in the dark.

"As we had done with previous potential investors we agreed to dilute our shareholding to allow a major change of control at the club.

"We need to make it clear at no time were we asked to give up any shares. We were asked to agree to allow the ‘B’ non-voting shares to be consolidated into the ‘A’ voting shares. The result would mean our voting share in the Holding company would reduce to just under 10%. We agreed this subject to a full change of control.

2Towards the end of 2019 press releases were prepared and ready to go out but the deal needed final EFL approval.

"By December 2019 it became clear that the assurances required by the EFL were not acceptable to EWM and they would not sign it off.

"Still working under a confidentiality agreement attempts were made to reach a revised arrangement.

"CUOSC were still asked to dilute our shareholding but this time there would have been no change of control at the club for the foreseeable future. We believe this would not have been acceptable to our members or the wider fan base. The Holdings Board was made aware that CUOSC would not support such an arrangement.

"It was unacceptable to CUOSC then and that remains the case today.

"However, we stayed in negotiations to try to find a solution. Delays were inevitable caused by both the Covid pandemic and EWM going into administration.

"In May 2021 the Holdings Board directors were read a statement from CUOSC formally withdrawing our support for the proposed revised deal. In recent weeks it became clear that finding a solution would be impossible.

"The football world has changed a lot since 2019. It is clear club owners and directors need to be more transparent and open with fans. We should point out that we have never spoken to the EWM owner, only his representatives.

"The government’s recent fan-led review is recommending supporters have more say in the running of their clubs and reinforces our belief that EWM were not a right fit for the club. This view was also supported by responses to CUOSC’s questionnaire on the ‘future of football’.

"United owe EWM around £2.4million – a debt that has since been novated to Purepay Retail. Along with the club, CUOSC have been asking for talks to arrange a repayment plan.

"This would remove the immediate risk of the debt being called in as it is currently repayable on demand. Also, potential new investors would then know where they stand.

"We hope that any such investor would want to work with fans groups for the benefit of the club and community.

"We reiterate that we have always acted in the best interests of the club and its supporters. We are not a blocker of change of control but are not prepared to risk its future on the wrong deal.

"CUOSC now believes the time is right to move on and we hope this announcement will usher in a new era of transparency and engagement with fans.

"If anyone has any questions or requires more details we would be happy to talk."