Hearts flit in doubt as SMG ready to sell stake 

MIKE AITKEN (SCOTSMAN)

SMG is on the verge of sanctioning the sale of its 20 per cent shareholding in Hearts in a dramatic development that could tilt the balance of power at the Edinburgh club, rid Hearts of £5million of debt and put paid to the spectre of leaving Tynecastle for Murrayfield.

It emerged last night that the purchasers lined up to buy SMG’s shares should be named this morning. 

The media group is understood to be ready to off-load its stake in Hearts and write off debts in excess of £5million for a knockdown price of £2million.

With the date for an extraordinary general meeting due to be called soon - the meeting will vote on the board’s proposal to sell Tynecastle - it has become apparent to those desperate to keep the club in Gorgie that they face a race against time to clinch an 11th-hour deal.

Now a price has been agreed for SMG’s shares as well as a settlement for the debt owed to the media company by the club, a successful purchase will allow those who object to the ground sale to block the plan’s implementation.

Edinburgh businessmen Leslie Deans and Robert McGrail, who are fierce opponents of the switch to Murrayfield, would be expected to vote with the purchasers.

   ‘There’s no doubt SMG hold the future of Hearts in their hands. That’s not what they wanted’ - WALLACE MERCER

It appears that the combination of Deans, McGrail and the new owners of the shares currently held by SMG would win any vote at the egm by a margin of up to 60-40.

This alliance would be in a position to force through the resignation of all existing Hearts directors, including chief executive Chris Robinson, the driving force behind the move to Murrayfield.

The purchasers could then proceed to form a fresh board of directors which would work on reducing the remaining debt while staying at Tynecastle.

A source close to the purchasers explained: "While it would be wrong to build false hopes, the proposed move from Tynecastle to Murrayfield is not done and dusted yet by any means.

"The fight goes on and the key aspect in all of this is the position of SMG. There’s no love lost between the company and Chris Robinson. SMG don’t like the position they find themselves in and, for the first time, are ready to sell their shares."

Apart from agreeing a reasonable price for those shares, SMG is likely to be viewed as the saviours of Hearts by writing down debts of over £5million and accepting a reduced sum of £2million by way of compensation. A spokesman for SMG would not be drawn yesterday on the latest developments. "We’re a public limited company and don’t comment on speculation," he said.

Events, though, are expected to move swiftly over the next 48 hours, with the identity of a buyer for SMG’s shares set to emerge as early as this morning.

There have been attempts to change the balance of power at Tynecastle in the past with Deans, a former chairman, failing with a £10million offer last year.

More recently, McGrail’s public request to buy Robinson’s stake didn’t elicit a reply from the chief executive who had earlier rejected the property developer’s offer to buy Tynecastle and lease it back to the club.

However, neither Deans nor McGrail have the resources to buy SMG’s holding on their own since the purchase of those shares would then force the businessmen to make a similar offer to the rest of the Hearts’ shareholders. The pair have always maintained that their priority is to put new money into the club rather than into the pockets of existing shareholders.

Once the identity of the buyer is revealed, it will also become clear that what sets this unexpected initiative apart from past bids is the availability of SMG’s controlling interest rather than the shares owned by Robinson.

Although he has no link with those now planning to gain a controlling interest in the club, Wallace Mercer, the former Hearts chairman, felt free to express his views more frankly yesterday after the current board made an unequivocal statement to the Stock Exchange on Monday about ground-sharing with the SRU at Murrayfield next season.

"The role of Chris Robinson as chief executive of Hearts has muddied the waters on this issue for some time," said Mercer. "There’s such a deep-seated negative feel against the chief executive it’s hard to see how the club can move forward as long as he’s still involved.

"If SMG are willing to take a more pragmatic view about the value of their shareholding then what happens next could very interesting. There’s no doubt SMG hold the future of Hearts in their hands and I’m sure that’s not something they ever wanted.

"My own view is the proposed move to Murrayfield is a jump into the unknown fraught with many grave concerns. The current board are facing Hobson’s choice and have been forced into taking a huge risk. That’s what worries me from the corporate angle as well as the supporters’ point of view.

"Speaking as a businessman, a supporter and a shareholder, I think there is a solution to be structured here - that’s why I’m not going to be a party to moving to Murrayfield. But if the club is to remain at Tynecastle then the minimum requirement is a sale and lease-back of the ground to raise capital and reduce the debt to the bank.

"I don’t think HBOS should be seen as the bad guys here. Maybe the bank would back off if there was a new board with a credible business plan. If it’s possible to finance the take-out of SMG’s holding then I’m sure the proposed move to Murrayfield will quickly disappear into the ether." 

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