Gateshead have agreed a sale in principle to Flacks Group, the US-based private investment company. The deal is subject to approval from the Independent Football Regulator (IFR).
The agreement was announced on October 9, following a difficult few weeks on and off the pitch at the International Stadium.
In a club update on October 11, Gateshead said Flacks Group would take a majority stake on terms that would see it acquire around 90 per cent of the shares at no cost. Shareholder Stephen Paylor and four of the five other key shareholders agreed to donate their shares.
The club said the deal would happen in two stages. First, Flacks Group would provide an immediate loan to cover overdue wages. Due diligence would then follow, with the aim of completing the takeover by the end of the following week. Once the deal is complete, Flacks would provide further funding to cover outstanding debts and working capital.
The sale follows the departure of key shareholder Mark Nellist, who had financially backed his hometown club for seven years. Nellist agreed to gift his shares to Paylor, a US-based shareholder, subject to IFR approval.
However, Paylor told the club he could not provide funding on his own. Interest from a third party he had been relying on had faded. Players and staff were not paid their September wages, and the club appealed to shareholders for support while it looked for fresh investment.
In a statement on October 10, the players said they had continued to train and play despite the situation. They added that, as of the previous evening, they had still received nothing.
Lee Cattermole and assistant Martin Smith left on October 4, the day after a home defeat to Worthing. That result left Gateshead bottom of the National League with nine defeats from their first 11 games, eight points from safety.
Club legend Ben Clark has taken caretaker charge. His first game ended in a 4-1 defeat at FC Halifax Town, after which he said he would hold talks with interim chairman Graham Wood about the takeover.
Flacks Group is run by Michael Flacks, a Manchester-born investor based in Miami. The company describes itself as a privately owned family office. It specialises in buying businesses where an ordinary sale process has become difficult, and its acquisitions include Kelly-Moore Paints.
Gateshead host Stafford Rangers in the FA Cup fourth qualifying round today. Stafford knocked out National League North leaders Hereford in the previous round.
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