Sunderland AFC takeover: This is what is happening behind the scenes as Stewart Donald's exclusivity period continues

As confirmed by CEO Jim Rodwell during an appearance on the #SAFCUnfiltered podcast, Stewart Donald remains in a period of exclusivity with a potential buyer.

So what does that actually mean in reality, and what kind of timescales are involved? We take a look:

SO WHAT HAS HAPPENED?

It was reported by BBC Newcastle earlier this summer that Sunderland owner Stewart Donald has entered a period of exclusivity with a potential buyer of the football club.

Rodwell has now confirmed this remains the case, despite the lack of updates over recent months.

It remains unclear who this party is, but it is understood it is neither Mark Campbell nor William Storey.

Other interested parties include Sammy Yu and the consortium led by Micky Gray, while the Echo also understands there has been interest from an American party - different to FPP Sunderland - in recent weeks.

But whichever group has been granted this period of exclusivity is now the front-runner to take control of the club.

WHAT DOES A PERIOD OF EXCLUSIVITY MEAN?

It essentially means that Donald has identified a preferred bidder and is now giving them a chance to complete a deal.

This party have – as confirmed by Rodwell - provided solid proof of funds and evidence to suggest they would be suitable owners of the football club, giving Donald assurances that firstly he will receive his desired asking price and secondly that the potential buyers can move the club forward.

It does not necessarily mean that a price or payment plan has been agreed, but heads of terms may well have been drawn up by this point and subject to further negotiation from both sides down the line.

A period of exclusivity allows the buying party to fully focus on the financial due diligence they need to complete without fear of being gazumped by a rival bidder.

Other potential buyers can still get their ducks in a row behind the scenes in case a deal collapses, but Sunderland’s focus will be on the party to whom they have granted exclusivity.

It also means that non-disclosure agreements (NDAs) will be in force, so it will be no surprise if updates are scarce as we move towards a deal.

It’s also crucial to note that this development doesn’t necessarily mean a deal will happen, only that things are moving towards the point at present.

HOW LONG DOES EXCLUSIVITY LAST FOR?

This differs on a case-by-case basis and will be stipulated by the exclusivity agreement signed by Donald and the potential buyers.

Periods of exclusivity can last anywhere from 21 days to a number of months, as was the case down the road at Newcastle United with their attempted Saudi-backed takeover earlier this year.

SO WHAT’S HAPPENING BEHIND THE SCENES AT THE MOMENT?

With a period of exclusivity agreed, potential buyers can focus on performing the checks necessary to facilitate a deal.

This includes entering the ‘data room’, examining Sunderland’s finances and then returning the club with further questions.

Coronavirus, however, is meaning some answers are difficult to come by.

As Rodwell explained: “How these things generally work, there's proof of funds and there's a viable plan. It's about credibility and a deal is then agreed broadly between the buyers and the sellers.

"Then you have that period of due diligence. They will send their lawyers and accountants into a data room, that we control, and they will take their time pouring over that. That in turn leads to many, many, many questions over a period of time.

"They do that, conversations then kind of recommence between buyer and seller and you have to draw up an SPA - a Share Purchase Agreement - and you move towards completion.

“It's not dissimilar to buying a house, just on a bigger scale and with more moving parts.

“Matters are progressing as well as they possibly can do, but there are questions we as a football club simply cannot answer in regards to COVID.”

WHAT COMES NEXT AND WHEN WILL WE KNOW MORE?

So the ball is now firmly in the court of the buying party - who can now examine the club’s finances and complete all necessary due diligence.

No more timelines have been set for when a deal could be completed.

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