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Saudi Arabian-backed consortium pressing ahead with £340 million deal to buy Newcastle United

PIF is part of a group of investors which has been organised by the British financier Amanda Staveley - PA
PIF is part of a group of investors which has been organised by the British financier Amanda Staveley - PA

The Saudi Arabian-backed consortium that wants to buy Newcastle United is pressing ahead with its plans to acquire the club for £340million.

It is hoped that the Premier League could be notified as early as this week with, according to sources, the Reuben Brothers, one of Britain’s biggest investors, part of the consortium and set to take a 10 per cent stake in Newcastle.

If the deal goes through – and sources stress that it is yet to be finally agreed with Newcastle’s owner Mike Ashley - then the Private Investment Fund which is the Saudi’s sovereign wealth fund will acquire 80 per cent and become the majority owner.

The remaining 10 per cent will be taken by Amanda Staveley, the financier, through her company PCP Capital that is also expected to assume the day to day running of Newcastle. The club’s new chairman is expected to be a representative of the Saudi Crown Prince Mohammed bin Salman who chairs PIF.

Sources have told Telegraph Sport that the deal is fully-funded and will not load Newcastle with any debt with the group intending to invest £200million in the first two years of ownership and also revamp the club’s training ground and academy as they make it more competitive.

Newcastle United owner Mike Ashley during the FA Cup third round replay match at St James' Park - Credit: AP
Newcastle owner Mike Ashley Credit: AP

The investment will be significant but will probably not be at the levels that Abu Dhabi have put into Manchester City more than a decade ago and not least because the landscape of football has changed since then with different financial rules in place.

The involvement of the Reubens is not the first time they have discussed being part of a consortium to buy Newcastle – with Staveley having involved them two years ago – but their commitment is understood to be far more progressed this time around.

The breakthrough for Staveley, who has been trying to buy Newcastle for two and a half years and ever since it was put up for sale by Ashley, is the involvement of PIF which is the biggest sovereign wealth fund in the world. The breakthrough was made in persuading them to be part of a consortium last October. The Reuben family’s involvement appears to stem from the interest of Jamie Reuben who is the son of David Reuben who runs the business with, a portfolio of investments estimated to be worth £18billion, with his brother, Simon.

Among the assets is Millbank Tower in central London and the brothers topped the Sunday Times “rich list” in 2016. They already own Britain’s largest racecourse group, Arena Racing Company, which includes Newcastle racecourse and there is likely to be a link between the two sports businesses and other developments in the north-east.

The involvement of the Reuben family would mean that Jamie will have to resign his directorship at Championship club Queen’s Park Rangers if he is appointed a Newcastle director as it is forbidden to sit on the board of two clubs at the same time.

The talks to buy Newcastle have been taking place for weeks with the consortium code-naming their plans “Project Zebra” - because of Newcastle’s black-and-white stripes – but news broke over the weekend. This caused consternation among the various parties but it appears it has not led to the deal being in danger of collapsing and moves are still in place although they are also at a delicate stage.

There is less impetus for the deal to be concluded before the close of the January transfer window on Friday because Newcastle have stabilised themselves in the Premier League but it is possible it may be completed by then.

Nevertheless it remains a complicated transaction and partly because of the personalities involved. Two years ago talks between Ashley and Staveley fell apart in acrimony after a cash offer of £250million was rejected while in the past 12 months various parties have claimed they have been close to buying the club.

Newcastle fans will be eagerly awaiting the outcome and whether it finally means the end of Ashley’s unhappy 13-year ownership of the club who face an FA Cup Fourth Round replay away to League One Oxford United on February 4 after Saturday’s goalless draw at St James Park.

The Saudis have been considering how best to make a move into football and have examined buying other clubs. Questions will be asked to why, with their wealth, the Saudis want to bring in minority partners but it is not unusual to the way they structure deals.

The fund is central to Saudi Arabia’s Vision 2030, a plan spearheaded by Prince Mohammed to diversify the economy away from oil and is also the driving force behind the country’s ambitions to develop new tourist and entertainment industries.

The involvement of the Saudis and Prince Mohammed will also raise issues with regards to the kingdom’s human rights record and whether this an attempt at so-called ‘sports-washing’. Football is also highly popular in Saudi Arabia.