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Takeover / New Investment - What Rumours Have You Heard?


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9 hours 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

 

9 hours ago, Dave_Og said:

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


 

Yes. Private limited companies can exclude 561 in their articles. 

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24 minutes ago, kowenicki said:


nominal value. 


...but if, as it looks, his intention is to water down the shares the FLG claim to have purchased, would it not have made more sense to issue more shares if indeed the loan value was greater than £20k, because quite frankly the shares are worthless...

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3 hours ago, Pidge said:

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.

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.

Dilutes whoever owns the other shares. 

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8 hours ago, Dave_Og said:

Dilutes whoever owns the other shares. 

Exactly Dave, that why I came to the conclusion that this is ALs motivation, not swapping a directors loan of (according to reports) millions, for shares with nominal value of £20,000.

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15 minutes ago, Pidge said:

Exactly Dave, that why I came to the conclusion that this is ALs motivation, not swapping a directors loan of (according to reports) millions, for shares with nominal value of £20,000.

There is no clue that I've seen as to how much director loan has been exchanged if any. 

 

Here's a theory and that's all it is. 

 

At a certain percentage level a shareholder gets certain rights, let's say 10%. It wouldn't be hard to issue just enough shares to dilute that shareholder to, let's say, 9.999999999%.....

 

That's what this regime has done. Replaced everything to conspiracy based speculation about what the hell is actually motivating them. 

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Ok here is another theory.  Say SC sold 90% of his 97% to AL,  a controlling share, but kept 7% so he had a right to be a director.  We know things went pair shaped and maybe SC was left with some shares which FLG want to buy.  In our little scenario that is 7 shares out of 100.  Now possibly there are 20,000 shares and SC/FLG now own only  0.035% of the company instead of the previous 7%.    That is not even a subtle dilution, that is a real 2 finger salute dilution to the FLG!

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1 minute ago, Pidge said:

Ok here is another theory.  Say SC sold 90% of his 97% to AL,  a controlling share, but kept 7% so he had a right to be a director.  We know things went pair shaped and maybe SC was left with some shares which FLG want to buy.  In our little scenario that is 7 shares out of 100.  Now possibly there are 20,000 shares and SC/FLG now own only  0.035% of the company instead of the previous 7%.    That is not even a subtle dilution, that is a real 2 finger salute dilution to the FLG!

That's the same theory... 

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Maybe we should be asking the Trust to confirm they have been offered extra shares, and if so, why did they not inform us ordinary fans (who they represent) of the offer and the reason they were given for the share issue.

Give me a few mins and I'll post something in the Trust forum

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11 minutes ago, Pidge said:

Maybe we should be asking the Trust to confirm they have been offered extra shares, and if so, why did they not inform us ordinary fans (who they represent) of the offer and the reason they were given for the share issue.

Give me a few mins and I'll post something in the Trust forum

I don't think it's a case of being offered. My understanding is that they have a clause guaranteeing that their holding will be kept at 3%.

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