Newcastle United is officially up for sale - and there seems to be plenty of interest in the Magpies.

Mike Ashley is keen to sell the club by Christmas - and the Sports Direct magnate’s public declaration that he is looking to offload the club has already attracted a number of interested parties.

Chief among them is Amanda Staveley and PCP Capital Partners, who was spotted attending Newcastle’s 1-1 draw with Liverpool - another Premier League club who she has attempted to purchase in the past - earlier this month.

Staveley has signed a non-disclosure agreement (NDA) with United, and her company has now entered a period of due diligence with the Magpies .

But what is the due-diligence process? How long does it take to complete? And does this mean PCP Capital Partners are set to become Newcastle’s new owners?

NUFC Writer Chris Waugh takes a closer look...

What is due diligence?

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Once a NDA has been signed, clubs are able to begin the process of ‘due diligence’.

Essentially, this is an investigatory period - which can be legally necessary, but in this case is voluntary on PCP Capital Partners’ behalf - ahead of a potential business transaction or contract being signed.

Newcastle’s books will be pored over by accountants and lawyers in order to determine the exact assets and liabilities United have.

Once this process has been completed, the potential buyers can then make an educated business decision on whether to pursue purchasing the club.

Interestingly, Ashley himself could perform ‘reverse due diligence’ with PCP Partners or any of the other interested parties in order to ascertain that they do indeed have the necessary funds to buy the club and take it forward.

A NDA is signed before due diligence begins so that non-public business information is able to be accessed by both parties in the agreement, though they are strictly forbidden from sharing it with third parties.

If any of the parties break the terms of the NDA, then action can be taken against them - and financial penalties, or in the most-serious cases criminal charges, can be sought.

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Ashley didn’t do due diligence when he bought the club, did he?

Famously, no he did not. Instead, Sir John Hall spent three days down in London during June 2007 without any pyjamas because Ashley’s lawyers insisted the Sports Direct magnate wanted a deal done there and then.

Sir John admitted to this correspondent over the summer that he was shocked Ashley forewent the opportunity to perform due diligence when buying the club for £134million.

As a result, Ashley got a nasty shock a few weeks later once his accountants and lawyers had trawled through Newcastle’s finances.

He discovered that the club’s debts were significant and beyond the £50m mark - and that transfer fees were being paid over a number of years.

Eventually, he was forced to put interest-free loans totalling £129m into the club.

How long does it normally take to complete the process?

Due diligence is a complex process - and it can take anywhere between one week to three months to complete.

The time period varies depending on the size of the business involved - given that Newcastle is a company whose last turnover was £129.7m for a calendar year, it is a sizeable firm to evaluate - and the exact scope and thoroughness of the due diligence being carried out.

There can be nine distinct areas to a due-diligence process - from a financial audit, through to a marketing audit, and then a legal audit, which will be particularly important on this occasion due to the on-going HMRC investigation surrounding United.

However, not all of these areas will necessarily be looked at - and, depending on what PCP Capital Partners or any other group who enters the due-diligence process wants to discover, there could be greater scrutiny over certain areas as opposed to other.

Normally, however, due diligence is completed within two to four weeks.

Does this signal a takeover is happening?

Not necessarily - but it is a significant step.

It will depend on what PCP Capital Partners, or indeed any other interested party who carries out the due-diligence process on Newcastle, discovers after sifting through the club’s finances and legal documentation.

If they believe the club are worth pursuing as a business venture, then a formal offer is to be expected following the conclusion of the due-diligence process.

This is a notable development, but it does not yet mean that PCP Capital Partners will be the new owners of Newcastle United. We are still a distance from that.