UK investment group PAI Capital has announced it has reached the “core principles” of a long-term lease deal for London Stadium, subject to it agreeing a takeover deal for the venue’s anchor tenant, Premier League football club West Ham United.

PAI Capital’s statement yesterday (Thursday) sees it ramp up its pursuit of West Ham, which is currently co-owned by David Sullivan and David Gold. PAI Capital made an initial approach for the club in February, but has now announced an agreement with London Legacy Development Corporation (LLDC), the entity which owns and operates London Stadium, along with its subsidiary, E20 Stadium.

PAI said the “long-term lease” would see it take full control of the Stadium, on condition of it successfully concluding a deal for majority control with the current owners of West Ham. PAI said in a statement: “The Stadium needs to be a home of which the club and its fans can be proud.

“The Boleyn (West Ham’s former stadium) has gone, times move on and with the right adjustments – and under single ownership – we believe that this Stadium can meet the needs of fans old and new. It will require changes to the configuration within the Stadium itself, as well as extended facilities for fans in and around the ground, that will significantly improve the match day experience.

“As things stand, divergent interests prevent the Stadium from reaching its full potential – despite it attracting the biggest events in sport and entertainment. The current arrangement between the Stadium owners and the club limit opportunities to integrate the club and the Stadium into the Olympic Park as a whole.

“Our vision is for the club’s interests and activities to be integrated with those of the entire Park – friends and families coming to watch men’s, women’s or academy matches should be able to enjoy everything the area has to offer instead of being shuffled from station to seat and back again.

“The agreement in principle has been developed with input from some of the most experienced people in the sport and entertainment space. At this stage it rightly focuses on the outlines plans for purchasing the club, then the Stadium, but we also believe that further discussions can explore how the club can best contribute to enhance and maximise usage of the Park both for the benefit of the club and for the wider east London community.”

London Stadium is costing Londoners more than £8m (€9.4m/$11.1m) a year to run, according to a report from the London Assembly Budget and Performance Committee, which published findings of an investigation into the finances of the LLDC in January.

In January 2020 it was revealed that E20’s losses had risen by more than £4m to £27.082m. E20’s latest accounts were detailed after it submitted its financial report for the full year ending March 31, 2019, to Companies House. While E20’s group loss for 2019 stood at £28.273m, the entity’s loss of £27.082m compared to 2018’s loss of £22.755m.

Commenting on the PAI approach, Lyn Garner, LLDC chief executive, said, according to the Evening Standard newspaper: “We have a clear responsibility to explore all opportunities to ensure the best possible outcome for the public and taxpayer from the Olympic legacy and are keen to work with West Ham United to reduce the cost of the Stadium to the tax payer.

“We have been approached by PAI Capital who we understand are putting together a serious offer to purchase the controlling interest at West Ham United. On this basis we have entered into discussions with PAI Capital on a set of principles that, if adopted, would see PAI Capital owning the Stadium on a long leasehold should they reach agreement with the current owners of West Ham United and take a controlling interest in the club.

“LLDC has always been open to discussions with potentially interested parties, including the current owners of West Ham United, as well as any credible possible investors into the Park, and this remains the case.”

The Standard states that West Ham believe PAI’s agreement with LLDC does not materially change the situation as no deal can be struck over London Stadium without taking over the club, with PAI said to be falling substantially short of Gold and Sullivan’s valuation of West Ham.

West Ham has also denied claims of a “formal approach” in February, stating that it was instead informal and lacked proof of funds. PAI says proof of funds have been provided.

Phil Beard, former chief executive of Championship club Queens Park Rangers and public face of the PAI Capital consortium, said in a statement: “In summary, we are pursuing an ambitious and complex deal.

“There has been too much controversy and contention over the past few years. We genuinely believe that the club, Stadium and Park will thrive when the stakeholders are all pulling in the same direction.

“The only thing holding us back for now is the reluctance of the club’s owners to engage in constructive and realistic negotiations. We believe they are willing to sell, and hope we can make progress in the coming weeks.”

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