Takeover / New Investment - What Rumours Have You Heard?

[singe]

2 hours ago, Pidge said:

I think this is very obviously an attempt to reduce the voting rights of any shares purchased by the FLG.  Call it a debt write off if you want, but the fact the Trust has been given shares which keep their share of the total at 3% would tend to argue against it being a simple debt write off.

 

I suspect the majority share holder has forced a share issue and paid for them at £1 per share and as a thank you to the trust for their support, has given them 597 more B shares.  End result = the FLG now own a very nominal number of shares.

 

Clever?  Probably, but unlikely to benefit the club much.

Could the Trust have a legal clause that it continuously has 3% parity with the owner as long as they don't waive it or is it entirely in the gift of the owner?

[lookersstandandy]

10 minutes ago, Dave_Og said:

............ Whether there are other loans is the pertinent question 

 

Quite. Been asking this for a while. This is what the Trust is for IMO.... and the lack of clarity on the topic is disappointing.

 

 

[nzlatic]

Have the FLG made a bit of a mistake by showing their hand early, enabling AL to then dilute before they have completed the purchase?  Or would that always have been an option to AL after they bought any shares?

[Pidge]

Just found this googling about a bit!

 

Companies Act 2006

 

Section 561 obliges a company to offer new shares first of all to its existing shareholders in the same proportions they already hold shares. In other words, it upholds shareholders’ right to be protected from dilution. If they are willing to pay the price asked for the new shares, they can have them. But this only applies where the shares are offered for cash – if a company is issuing shares in exchange for shares in another company, say, or in payment for a non-cash asset, there is no requirement to offer the shares to existing shareholders first of all.

The section can be disapplied, along with section 549, either in the articles or by a shareholder vote, though only by a special resolution.

Again, institutional shareholders have their price: only shares equal to five per cent of the issued share capital can be issued without first offering them to shareholders.

 

 

Looks like there should be protection against dilution

[Pidge]

It would seem the share issues are nothing to do with directors loans

[Dave_Og]

2 minutes ago, Pidge said:

Just found this googling about a bit!

 

Companies Act 2006

 

Section 561 obliges a company to offer new shares first of all to its existing shareholders in the same proportions they already hold shares. In other words, it upholds shareholders’ right to be protected from dilution. If they are willing to pay the price asked for the new shares, they can have them. But this only applies where the shares are offered for cash – if a company is issuing shares in exchange for shares in another company, say, or in payment for a non-cash asset, there is no requirement to offer the shares to existing shareholders first of all.

The section can be disapplied, along with section 549, either in the articles or by a shareholder vote, though only by a special resolution.

Again, institutional shareholders have their price: only shares equal to five per cent of the issued share capital can be issued without first offering them to shareholders.

 

 

Looks like there should be protection against dilution

Going beyond my area of expertise now but even companies listed on AIM can readily override s561

[Dave_Og]

18 minutes ago, BP1960 said:

 

We thought the club was in a good position when AL arrived. Do you mean it's better now?

Looked at in isolation it is good that loans are now shares. Too many other unknown factors for a robust conclusion 

[Pidge]

1 hour ago, Dave_Og said:

Going beyond my area of expertise now but even companies listed on AIM can readily override s561

So really we need the wonderful “Trust”, with their 3% shareholding, to tell us what this is all about.  Did the major shareholder override s561 in some way, and did the Trust, either with their pet Director, or by voting, approve this share issue.

[BP1960]

1 hour ago, Dave_Og said:

Looked at in isolation it is good that loans are now shares. Too many other unknown factors for a robust conclusion 

 

I thought more transparency was mentioned at the last public meeting?

[LaticMark]

Could be worse?

 

"Madcap millionaire who schmoozes with TOWIE stars and pumped £3m into non-league Billericay buys a new club, signs 15 players, sacks the manager and puts himself in charge... all on his first day!"

 

Glenn Tamplin

 

[al_bro]

7 hours ago, lookersstandandy said:

Yep, if that’s the case.... it’s a counter-FLG motivated move. Maybe he wouldn’t have written off loans had the FLG not announced they were buying shares from somewhere (most likely the Necarcu debenture as far as I’m concerned). Either way, if true, it’s only a good thing. Kieran McGuire says it’s only £20k though. Darren says it’s more and he’s reported back to the trust. Would be good to hear from the Trust sooner rather than later on the topic. This, unlike PTB, is what they are there for.

£20k is the nominal value, not the actual value which could be more or less. It does dilute the value of a share because more are out there. What a share is valued at is anyone's guess, I suppose whatever the FLG have paid for the shares should be an indication. They are however now worth less than they paid for them.

[jorvik_latic]

27 minutes ago, LaticMark said:

Could be worse?

 

"Madcap millionaire who schmoozes with TOWIE stars and pumped £3m into non-league Billericay buys a new club, signs 15 players, sacks the manager and puts himself in charge... all on his first day!"

 

Glenn Tamplin

 

 

Doesn't look too dissimilar to me apart from the TOWIE bit.

[HarryBosch]

They and/or their advisers seem quite good at stuff like this, if they have indeed mugged off the FLG. 

 

If only they could be good at producing a decent team instead... 

[sjk2008]

It’s definitely an attempt to dilute what the FLG are buying.

[League one forever]

11 hours ago, Dave_Og said:

If that's the case that's good. The alternative view is that by doing so he has significantly watered down the %age of shares that the FLG are buying represents. Whatever they are. 

 

That seems quite a plausible motive to me. The usual reason for converting loans to equity , and not an unreasonable one, is to give the lender a greater equity stake and therefore some value for the loans and the possibility of recovering that value, or some of it, in the event of the sale of the business or its return to health and ability to pay dividends. 

 

If he owned 97% before and still owned 97% after the share issue there'd be nothing gained and the loans may just as well have been written off. 

 

So my poorly informed conclusion would be that he has effectively written off debt, which is good, but there are no clues as to how much debt and whether there remains any outstanding.  In the meantime the shares which FLG are buying are reduced, probably significantly so, in terms of the share of the company they represent. That may mean they fall below an important percentage level but I don't know that. 

 

All conjecture. 

Interesting Dave. 
 

FWIW I think your spot on there.
 

Would AL write off loans because he loves the club. . or would he write them off to piss off/ do over the FLG. I think we all know which is the far more likely. 

[leeslover]

40 minutes ago, HarryBosch said:

They and/or their advisers seem quite good at stuff like this, if they have indeed mugged off the FLG. 

 

If only they could be good at producing a decent team instead... 

It's got Adam Whatsisface all over it. Barry and Mo didn't come up with that one

[singe]

I don't know the FLG, or specifically Paul W, but it strikes me that he would have anticiapted this move.

[whittles left foot]

1 hour ago, sjk2008 said:

It’s definitely an attempt to dilute what the FLG are buying.

Such confidence in what so far appears to be just hearsay.

[Dave_Og]

17 minutes ago, singe said:

I don't know the FLG, or specifically Paul W, but it strikes me that he would have anticiapted this move.

 

nothing they could do about it.

[Dave_Og]

5 hours ago, Pidge said:

It would seem the share issues are nothing to do with directors loans

Not sure how you've reached that conclusion 

[maddog]

1 hour ago, Dave_Og said:

 

nothing they could do about it.

 

Not buy them yet?

[Dave_Og]

Just now, maddog said:

 

Not buy them yet?

Well they'd be worth less after an issue of shares but less than the bugger all they were worth in the first place...

[sjk2008]

1 hour ago, whittles left foot said:

Such confidence in what so far appears to be just hearsay.

Whatever. Just telling you that it is...

[laticsmarra]

9 hours ago, Pidge said:

I think this is very obviously an attempt to reduce the voting rights of any shares purchased by the FLG.  Call it a debt write off if you want, but the fact the Trust has been given shares which keep their share of the total at 3% would tend to argue against it being a simple debt write off.

 

I suspect the majority share holder has forced a share issue and paid for them at £1 per share and as a thank you to the trust for their support, has given them 597 more B shares.  End result = the FLG now own a very nominal number of shares.

 

Clever?  Probably, but unlikely to benefit the club much.

Its no thank you to the Trust, he will have had to issue them with the shares to keep them at 3% and stop the shareholding being diluted

[Pidge]

Follow the logic and see if it makes sense. The whole concept of directors loan being converted into shares is relevant to companies with multiple owners. A director invests his capital. The board reward that investment by giving him extra shares, hence bigger share of any dividends or assets. This is instead of a directors loan which would need to be repaid.

1 hour ago, Dave_Og said:

Not sure how you've reached that conclusion 

In Oldham’s case, the only significant share owner has taken more shares, but not increased his percentage of those shares, hence his share of any dividends or assets stays the same. In fact he has even given the minor share holder shares to maintain the same percentage.  I’m suggesting there is no advantage to the director investing his money in increasing the shares in this way, so there is no trade off against the advantage of maintaining a directors loan in the accounts.