MrBunce

Yes that is right.

Yes there is one (for reference, in the Shareholders Agreement, schedule 3, towards the back). There are also tag along rights (if someone sells they can sell with them) and drag along rights (if someone sells they can force the other to sell). These are pretty standard. There is also a restriction on transferring shares unless the person receiving those shares agrees to be bound by the Shareholders Agreement.

Hmm. I went to re-read the rules to check I wasn't chatting nonsense. Upon reading the rules, my interpretation is that Mr Attanasio should already have needed to pass the Owners Test when the Shareholder's Agreement was entered into. That's because Attanasio and Delia and Michael became concert parties. So I'm not sure what EFL approval would now be required, I'm a bit stumped.

I missed this Purple. There are two different tests: one for directors, one for owners. Attanasio would have passed the directors test. There would now be a different and separate owners test as he will own more than 25% of the voting shares in the club after the allotment. The owners test is much more onerous as it requires providing a substantial amount of information and documents to the EFL which they must then examine. It includes the directors test, which Attanasio will have already passed, but if a second director is to be nominated as part of the allotment process (I can't recall how it works in the shareholder's agreement), then they will need to pass the requirements before the transaction will be approved by the EFL. p.s. this is my recollection from reading all the rules back when the Derby fiasco was going on. But I believe the above would not have changed since then.

Interesting. The resolution does not contain the qualification that the allotment is subject to EFL approval. Unlike the resolution for Attanasio to become a director. I know it's semantic, but another little oversight. As far as I'm aware, the club would have needed to notify the EFL at least 10 working days ago on the potential change in control. So hopefully, it'll be sorted out quickly. But given the documentary requirements and the club's track record, I won't hold my breath...

I think this is just another admin slip up. I just assumed they had already done this. It should have been filed around a year ago (note the September 2022 date). From my memory, the PSC rules make no distinction between ordinary and preference shares so when Attanasio was allotted the 1,000,000 C Preference Shares he'd end up owning over 75% of the total number of shares in the club. Delia and Wynn-Jones at that point still possessed more than 50% of the voting rights. I'm not sure the submission is fully correct anyway, as my interpretation of the rules is that Attanasio has significant influence due to having a veto right on the club incurring additional debt. But I'll admit I haven't dealt with PSCs in a while.

At least from my side, I've been posting because it's at the very rare inter-section between my profession and something I really care about. I'll also nail my colours to the mast, I think football finance is critical to understanding the modern game. I hope(!) that I've provided some explanations and some insights as to the often murky world of corporate finance that others have found interesting. I also think it's a good thing that shareholders can discuss this and have a vote (although, for what it's worth, I think it's a foregone conclusion anyway - something I've said throughout). A significant slice of my work has been in countries where individuals and minority shareholders don't have these protections (or worse...). So whilst it seems like annoying red tape, I can assure you these rules are very valuable. But besides that, what an envious position for Norwich fans to be in. Think only of the position of Everton fans (see discussion above). They've had no agency at all in Kenwright selling to Moshiri then to 777. No say, no information. Nothing. So we Norwich fans are privileged and I'll take full advantage of that whilst it's still available! EDIT: @GMF beat me to it with his impassioned treatise on our club.

Exactly.

I'm sorry Biggish but I'm going to call you out on this. I think your points are mostly simplistic or mischaracterisations, sometime both. On 1, I'm not even sure what you are trying to say, that the "fans" would turn on "shareholders" if they don't vote for the waiver? What does that even mean. Of course the shareholders of the club are not going to be statistically representative of the entire fan group. I don't think anyone has claimed that. However, according to @GMF there are nearly 7,000 of them. That is a big number. The key point however, is that, given the circumstances in which they acquired their shares, all (or the vast majority) are long-term fans (and probably lifelong fans at that) of the club. Mr Attanasio, for all his virtues, is not. He has publicly been non-committal to a long-term involvement in the club. It is both fair, and I think right, to be hesitant in the control of the club moving from a lifelong fan to, a joint control structure shared with someone who is not. On 2, this is simplification of what's going on. Sure, at it's very simplest, that's the transaction. However, this leaves out the following. That the deal takes the current majority shareholder(s) into a minority and changes the control of the club. That the shareholders are being prevented from BOTH buying or selling at the price underpinning in the transaction. That the price underpinning the transaction is substantially the same as the share price c.20 years ago when the club was teetering on administration. That the vote on the waiver is a "take it or leave it", if it doesn't go through it won't happen (despite there being no legal reason why it couldn't) and that it would result in the club potentially having to pay back DOUBLE the principal of the convertible loan. There is good reason why these things must be voted for by shareholders - in some instances the vote requires only independent ones in others 75% of shareholders. On 3, by the rules of the Takeover Code they must be deemed independent directors. But it is entirely fair to question how independent they truly are. One is the publicly announced successor and inheritor to one of the concert parties and owes his position at the club to being related to that party. The other is the executive director of the club who personally signed the agreements underlying the proposed transaction. As executive director of the club, has a commercial interest (not personal) in the transaction proceeding, for example with an increased financial budget to work with. These are in contrast to an independent non-executive director who would not have these perceived (or actual) conflicts. We have had such directors in the past, perhaps most publicly Ed Balls and Stephen Fry. Sure, one may question in the UK how independent non-execs in the UK are but that's a red herring here. The club, simply do not have such directors (through choice or design) and therefore the independent report has been written by directors who, on the face of it, cannot be said to be fully independent of the proposed transaction. On 4, I'll confess to saying I haven't read every post on this thread, but I don't recall anyone saying there's secret papers. Now the club may (and almost certainly) have provided representations to the Takeover Panel in securing the option of the waiver. But that would totally be expected! The issue, at least from my point of view, is that the only 'assurances' to shareholders have been in the form of vague soundbites fed to local media or presented through the club's media channels. That is significant. Shareholders are being asked to vote on a very important thing, the financial future of the club. It is obviously reasonable to want as much comfort as possible in being able to make a decision. This post is long enough already. I hope that you understand it comes from a place of kindness, not malice. But it felt important for me to set the above out.

It's not clear Badger. On the one hand, it's a lot of money to borrow for working capital type purposes but on the other hand some of the terms are less favourable (higher interest rate, the repayment clause) and the maturity isn't much longer than the secured loans. The documents were suitably (and expectedly) vague on the purpose of the financing saying something like (off of the top of my head) that the financing was for payroll and other expenses. I suppose we won't find out until the accounts come out (even then, that will be a snapshot as at 30 June 2023).

@shefcanary - No worries, thank you for having a look at the numbers. I heard the figure from the journalists but couldn't reconcile it from what I had seen so wanted to crack excel out and add it up for myself. @GMF - my 1.55 is a "made up" figure in the sense that if you convert those loans at that FX rate it will sum up to the £33m in the circular. So a lot of big assumptions going on but seems broadly similar to the FX on the loans where we have a USD and GBP value. @nutty nigel - that is so very kind of you and it means an awful lot. Thank you!

Yes. Thus my reference to the 'ultimatum' - if the waiver is not granted, the loan won't be capitalised and therefore the Club will have to pay back £9.7m. Effectively asking 'mom and pop' investors to give up their rights or the club financially suffers. The repayment date was extended as set out in the Relevant Loan Agreement to September 2023 and further in the Amendment to February 2024. Now if you want to really put your tin foil hat on, note that: the Term Sheet makes no reference to the necessity of the Takeover Panel Waiver and in 10(d): "Delia/Michael shall vote in favor of any such shareholder resolution to give full effect to the Proposed Share Issue and, together with the Club, shall use best efforts to procure other shareholders of NCFC vote in favor of the relevant shareholder resolution". Emphasis mine.

Hi Shef, I've now got access to my computer and tried to crunch the numbers on the financing. My reading of the documents of the figures are different to yours. I'm not sure if it's because I'm missing something (refs in [ ]). My reading is that Norfolk has provided £33,637,200 of financing to the Club since the C Pref / Share purchases [Circular: page 8]. I have this as: - First Promissory Note 14/12/22: $2,109,360 (balancing figure FX rate: 1.55 USD/GBP) [Term Sheet: 3] - Second Promissory Note 19/12/22: $7,692,300 (balancing figure FX rate: 1.55 USD/GBP) [Term Sheet: 4] - Loan Agreement 20/01/23: £1,634,700 [Term Sheet: 8] - "Relevant Loan" 20/01/23: £4,682,800 [Term Sheet: 9] - Line of Credit 20/03/23: £21,000,000 [Term Sheet: 14] (assume available as Relevant Loan provided, i.e. Ecotonian Financing did not arrive, but may have not been drawn) Total: £33,637,200 Then total cost of ordinary share purchases: £3,317,425 (132,687 shares @ £25). Then C Preference Shares: £10,000,000 (10,000,000 shares @ £1). Total spend: £46,954,625 = £33,637,200 + £3,317,425 + £10,000,000. Are you saying that Mr Attanasio has extended further financing in his own name beyond that above? The Promissory Notes, Loans and Line of Credit has been provided by Norfolk according to the Term Sheet. Otherwise, I'd get nowhere near the £70m that you refer to. I'd be grateful for your thoughts!

The issue is that if the waiver doesn't pass the club will have to repay twice the principal of the loan in Feb 2024, that is $12m. Bear in mind also that the first £31m repayment of the secured lending on parachute payments is due in March 2024 (assuming it hasn't been refinanced, though I'd question why you refinance loans at 5.75% to those at 11% with the same maturity). That is a significant cash crunch. As I've mentioned before, however you cut it, Attanasio is getting a great deal.

@PurpleCanary An excellent summary. You've set out, in a more eloquent way, the same thoughts I have reached having read through all the documents today. I have very little to add. I will briefly add that, if the club/'independent directors' wanted to provide the shareholders with further factual information they could do so through the prescribed format of the documents shareholders have been sent out. The reason for that prescribed format (in general) is to prevent shareholders being provided with misleading or incomplete information. Arguably the most famous case (albeit under different laws) is the RBS rights issue case where shareholders claimed they were mislead as the bank teetered into the abyss. For what it's worth, these issues are actively litigated and I have personally worked on one myself, albeit in a different jurisdiction. So as @GMF says, the lawyers would likely have kiboshed it. That leads me to the conclusion that this information or Q&A or whatever it was, is likely not factual or legal agreements (i.e. Attanasio has represented X) rather 'intentions' or 'wishes' that are not binding. That would certainly explain the vague promises that the Pink'un Boys were setting out. This leads me to my conclusion on the matter. I, like @shefcanary, trust Attanasio. However, for me that is not enough to vote 'yes' to a proposal that would effectively spell the 100+ year fan ownership of the club I support. Jeff Bezos has spoken about 'regret minimisation' when making decisions. This is a framework I have often used as well. Given that there is, as @PurpleCanary points out, not a great deal at stake if the waiver fails, the possibility of regret from my voting that way is minimal. However, there is a possibility (however remote) that I could come to deeply regret voting for the waiver. For example, if it turns out the club had relevant information it did not pass on, or Attanasio / Delia goes back on 'their word' or that this transaction is the precursor to a third-party owner who I would not like to own the club. Ultimately, I suspect it doesn't really matter.

Completely agree Purple. If this was a proposal from a large plc it would be getting a negative rating from the proxy advisory agencies (ISS, Glass Lewis). It highlights again something that I know both of us have banged on about a lot - not having a strong independent chairman since Ed Balls left. I understand that that the club wanted to send explainers out (and for good reasons they are not allowed to). However, they would not need to were the transaction not so complex. For example, it was more clear to me this morning having read a little more that Delia is giving up quite a bit financially by being diluted at a low price for the shares. I'm unimpressed (even if there is principled negation) as it leaves "mom and pop" investors having to make a call on something we can't possibly hope to understand. For example, here's an important question that hasn't been answered: depending on which way the vote goes, will Mr Attanasio stop lending the club money? There are plenty more. To be clear, I'm warm to Mr Attanasio. His business track record is impressive. He has been a patient and thoughtful owner of the Brewers. I'm excited to see what insights from baseball he and his team might bring to Norwich. He makes many of the right noises. We just sit in a lacuna of information.

I'm away at the moment, so I've not had the opportunity to digest all the information as I'd like. However, I would say that I'm in agreement with you Purple (and @shefcanary @Parma Ham's gone mouldy and others). Overall, I'm not sure what way I will vote. On the one hand, to vote against the proposal would be to cause financial harm to the club. It would be in the financial interests of the club to see this go through. On the other hand, removing shareholder rights and protections should be very difficult (for obvious reasons). I must say, I'm deeply unimpressed that this has been presented as an ultimatum. No matter what spin the club put on it through the media (more on the shortly) that is what it is. Fair play to the Attanasio consortium (we now know Ressler and unnamed others are also investing significant money into this) for their negotiating prowess. They've played a blinder in my opinion. Could the club have negotiated better than a 11% unsecured loan note? Possibly. The market has soured the past 12 months and I don't work in that area of finance. That the club's management, who have been so hostile to external debt have so suddenly and significantly changed their position on this is intriguing to me. My hope is that the Attanasio consortium have provided some private undertakings (perhaps to Mr Foulger and or Delia) that mean there are some 'strings attached'. I don't agree (yet) that Delia is leaving much on the table (except for being diluted, like us other shareholders). Mr Foulger, along with the others who have sold out at £25 a share, certainly have. The pink'un boys have kissed and made up with club in time to put out their explainer - perhaps conveniently. On the one hand, they've done a good job explaining things in layman's terms. But it is hopelessly partial towards selling the club's narrative. From a professional point of view (as someone who litigates these things for a living), it really does toe the line in what is legally acceptable. Legally, the club can't come out and make some of the statements that the pink'un boys have done and let's be honest they've basically taken what they've been told and repeated it. Some of it is laughably naive (one example, that Attanasio will want to keep having fan shareholders involved in the club - one need only look at a certain unnamed shareholder to see how much of a pain that can be). That was all rather rambling, which I apologise for. I think in my first comment on this transaction back in Feb was that this is the likely the beginning of the end to glorious Fag Packet Accountants guild. I have thought often since of the phrase: "you can't put the toothpaste back in the tube". Once fan ownership of the clubs goes, it won't come back. For better or worse (and for what it's worth, I definitely think for the better) it has defined the club's last twenty years. This transaction raises some fantastic opportunities but some threats (see @Parma Ham's gone mouldy 'ferrari' post). I honestly don't know whether it's a good thing or not.

With respect to Mr Markscheffel, that misses the elephant in the room - that Southend has been owned by one of the worst owners in football league history, Ron Martin. This has been going on for nearly 15 years with, at various times, players, HMRC and creditors not being paid. There have been numerous points deductions, court cases, late accounts and last minute scrambling.

Doing the lord's work Purple. Thank you.

https://www.linklaters.com/en/about-us/news-and-deals/deals/2022/september/linklaters-advises-on-the-acquisition-of-a-stake-in-norwich-city-fc

A small point of correction Purple. It was Linklaters who advised Attanasio. The club was advised (for the Foulger transaction) by a small Harrogate-based firm called Mccormicks (incidentally where Zoe Webber has worked previously). I don't know whether the club has subsequently retained Mccormicks for the subsequent transactions.

Thanks for the correction. I hadn't noted this down in my 'beast' spreadsheet (yes I will see myself out).

I know you are jesting. But for the record (lest certain persons adopt this as a new cloud to shout at), all director loans were paid off in 2016. A new loan of £250k by Smith & Jones was advanced in 2017, of which £74k was outstanding the end of last season. Given the timing, I assume the £250k was part of the bond subscription. £2.2m of that is outstanding, but is not accruing interest (i.e. this is money people have chosen, for whatever reason, not to redeem)...

Is this the season ticket rebate / £360k? If so, that was a gift according to the 2009 accounts.

There have been so many great comments on the football, strategy and governance side that I don't feel I can add to that. But I can add on the finances. What Purple says is key. I don't want to be too hard on the club, but Norwich have not been good enough at increasing non-TV revenues. Yes, we've done better than lots of clubs. However, given the 'starting point' and how our competitors are doing it is clear more work needs to be done. Norwich's non-TV income in 2022 was £32m. In 2016 it was £28m, in 2012 it was £26m. Watford's was £43m. This to me resonates anecdotally when I (which I must confess is very infrequent these days) visit Carrow Road. It 'feels' like a 'tired' ground. Not much investment (and I'm not talking about ground expansion here_ has gone into the ground to generate more income. On matchdays, at least to me, it seems to 'fill' late as supporters spend their time and their hard-earned money elsewhere pre-match. Another thing that is being pushed at many clubs is turning income from 30 days a year (i.e. matchday only) to 300 days a year. Spurs are the biggest example of that. More in our 'league', Watford have also done a great job at utilising their ground for many non-football events - it's clear in the numbers that it is working for them. This to me, exemplifies Parma's tragedy of last season. Not only did Norwich err in all the ways meticulously detailed but at such an enormous cost. £118m in wages, £40m more than Watford, nearly double Brentford's! Only £3m less than Wolves and Leeds and £3m more than Brighton. £48m on player purchases, double Watford's. £8m more than Brentford, only £7m less than Everton. At the same time, spending some £13m in agent's fees over the past 2 years (the pessimists among us might suggest we'd struggle to get much more than that if those players were sold today). (All numbers from Swiss Ramble) Investing in 'non-football' is always challenging. But one can't help but feel the pay-off would have been many times better than the on-pitch investment. Creating a venue and ethos that people want to spend their time, passion and their money(!) is incredibly valuable. My hope is that Mr Attanasio would be all over this. Baseball has done a great job of this. For those interested, look up Janet Marie Smith / retro ballparks.