Sunderland AFC takeover: What does a 'period of exclusivity' mean and what's the timeframe for a deal to be done?

Takeover talk continues to grip Wearside with reports owner Stewart Donald has now entered a period of exclusivity with a potential buyer.
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Here’s everything we know about the latest update in the Black Cats’ takeover saga, and what could come next at the Stadium of Light.

SO WHAT HAS HAPPENED?

Sunderland owner Stewart Donald has entered a period of exclusivity with a potential buyer of the football club, report BBC Newcastle.

Stadium of Light.Stadium of Light.
Stadium of Light.
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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 which ex-Sunderland defender Micky Gray is hoping to broker a deal for, while the Echo also understands there has been tentative interest from American parties - 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.

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This party will likely have 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, of £37.6m, 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.

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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.

WHAT COMES NEXT AND WHEN WILL WE KNOW MORE?

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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.

BBC Newcastle claim that Donald is keen to sell before the 2020-21 season begins, giving the buying party six weeks to complete the process.

This isn’t an untypical timeframe for completing a takeover - and the wheels will now firmly be in motion to move towards to a successful outcome.

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