New Board Director Confirmed - Mark Attanasio

[ricardo 7,347]

20 minutes ago, PurpleCanary said:

I haven't seen the wording of this and stand to be corrected, but the resolution may be to create 10m C preference shares with a nominal value of £1 per share. If that is right it doesn't mean all 10m will be bought and it certainly doesn't mean they will be bought at £1 a share.

There are already 1m ordinary shares that can be issued and they have a nominal value of £1 but it is unlikely they would be sold at as low a price as £1.

Indeed, there would be plenty of offers for a one pound share that paid 7% interest.

[shefcanary 2,388]

The C Preference Shares are the vehicle that allows Attanasio to invest some hard cash to test his "mettle" without further dilution of the shareholdings, but only if those C Preference shares are not convertible into ordinary shares at some point in the future.  Any detail on whether these C shares are convertible at all in the letter (my post does not arrive until lunch time)?

[sonyc 5,492]

15 minutes ago, shefcanary said:

The C Preference Shares are the vehicle that allows Attanasio to invest some hard cash to test his "mettle" without further dilution of the shareholdings, but only if those C Preference shares are not convertible into ordinary shares at some point in the future.  Any detail on whether these C shares are convertible at all in the letter (my post does not arrive until lunch time)?

Yes. There is a conversion right (page 6) upon a "trigger event" (defined at length a bit later in the document but principally relating to dispositions, but importantly the sale of all or substantially all of the assets of the company). Equal to 10% of all ordinary shares. Your summary looks spot on.

Will be worth a full read as it's too long (could photograph an excerpt if you're really interested now).

Fascinating stuff.

Edited August 22, 2022 by sonyc

[shefcanary 2,388]

1 minute ago, sonyc said:

Yes. There is a conversion right (page 6). Equal to 10% of all ordinary shares. Your summary looks spot on.

A ha. As Purple has said it will be very interesting how many of the 10 million C Preference shares Attanasio takes - if all then that on conversion is 1 million ordinary shares potentially, which would certainly make him the largest shareholder with about 61% of shares. If he has Foulger's 16% already in the bag, that takes his shareholding above the magic 75%!  I will await my letter to see the terms attached to conversion to see how realistic a conversion will be and how soon it can be triggered, but in absence of the letter this effectively appears to confirm it is a takeover, albeit delayed until Mr Attanasio and Smith & Jones thinks the time and circumstances is right !

[PurpleCanary 5,554]

42 minutes ago, PurpleCanary said:

I haven't seen the wording of this and stand to be corrected, but the resolution may be to create 10m C preference shares with a nominal value of £1 per share. If that is right it doesn't mean all 10m will be bought and it certainly doesn't mean they will be bought at £1 a share.

There are already 1m ordinary shares that can be issued and they have a nominal value of £1 but it is unlikely they would be sold at as low a price as £1.

Just to emphasise this point, when Foulger bought 80,000 or so new ordinary shares several years ago they will have had a nominal value of £1 but he didn't pay only £80,000 for them. I am sure it was a six-figure sum.

[PurpleCanary 5,554]

9 minutes ago, shefcanary said:

A ha. As Purple has said it will be very interesting how many of the 10 million C Preference shares Attanasio takes - if all then that on conversion is 1 million ordinary shares potentially, which would certainly make him the largest shareholder with about 61% of shares. If he has Foulger's 16% already in the bag, that takes his shareholding above the magic 75%!  I will await my letter to see the terms attached to conversion to see how realistic a conversion will be and how soon it can be triggered, but in absence of the letter this effectively appears to confirm it is a takeover, albeit delayed until Mr Attanasio and Smith & Jones thinks the time and circumstances is right !

Shef, my letter will probably arrive sometime in November, so i am still guessing as to the precise wording, but if it is 10m C shares with a nominal price of £1 then the question is not only how many Attanasio buys but at what price!

It certainly doesn't mean he is definitely putting £10m into the club. it could be more or it could be less. And it doesn't mean only Attanasio might  buy. Others could.

Edited August 22, 2022 by PurpleCanary

[BigFish 1,986]

On 20/08/2022 at 16:35, PurpleCanary said:

Well, we have already had what for my money is the unchallenged post of the year. From - I think - KennyFoggo, or perhaps it was KenFoggo. Either way, apologies to which ever one it wasn't.

When the news broke back in May there was this odd silence from quite a few usually very voluble posters. The kind of silence from certain posters when we win a game (as this week, as it happens), but much more pronounced.

You could almost hear brains whirring round trying to find something critical to say about S&J when the usual complaints about train sets and dolls' houses and nephews and never listening to offers and never selling seemed to have been quite exploded.

But finally something sparked with one of the Foggos, who posted: "This just shows there were buyers out there all the time."

Bravo!

 

1 hour ago, Jim Smith said:

So this appears to be a way of getting "investment" into the club without D&M giving up any control (indeed the % shareholdings of ordinary shares stay the same MA just replaces Foulger) which is no doubt why its all taken such a long time to settle on a mechanism that would get past the owners of the train set.

😀

[Diane 500]

2 hours ago, A Load of Squit said:

I've read mine but as I don't really speak the weird language that these documents are written in can I add to this;

What is the difference between A,B & C preference shares?

Why are the £10m new shares C preference (if this is answered in my first question then TIA)?

 

Im glad its not just me, didnt like to ask myself 

Can you help @GMF  ( in simple English) 😀

 

 

[sonyc 5,492]

24 minutes ago, shefcanary said:

A ha. As Purple has said it will be very interesting how many of the 10 million C Preference shares Attanasio takes - if all then that on conversion is 1 million ordinary shares potentially, which would certainly make him the largest shareholder with about 61% of shares. If he has Foulger's 16% already in the bag, that takes his shareholding above the magic 75%!  I will await my letter to see the terms attached to conversion to see how realistic a conversion will be and how soon it can be triggered, but in absence of the letter this effectively appears to confirm it is a takeover, albeit delayed until Mr Attanasio and Smith & Jones thinks the time and circumstances is right !

And my view, for what it's worth, is that Delia and Michael are preparing to retire and very soon. Attanasio is considered a good fit for them. 

[Greavsy 2,412]

 

 

[Jack Flash 13]

2 minutes ago, sonyc said:

And my view, for what it's worth, is that Delia and Michael are preparing to retire and very soon. Attanasio is considered a good fit for them. 

Agree with that and I suspect that Tom has gone along with this arrangement also thus it will be the Tom and Mark Show going forward.

[BigFish 1,986]

Reading the last para of resolution 1, I am assuming that abolishes the famous 1,000,000 unallocated ordinary shares.

[PurpleCanary 5,554]

38 minutes ago, BigFish said:

Reading the last para of resolution 1, I am assuming that abolishes the famous 1,000,000 unallocated ordinary shares.

It looks that way, which is interesting in terms of ownership going forward. But there is nothing to stop a future decision to have 1m ordinary shares created. The other point is that these C shares do indeed have a nominal value of only £1, which is unlikely to be the selling price.

Edit. That is based on the assumption they are creating 10m C shares, which would make the nominal price £1. But it may be  the number of shares is less than that, in which case the nominal price will be higher.

For example it could be 1m C shares with a nominal value of £10, giving a nominal aggregate value of £10m. The resolutions don't specify how many of these C shares are being created. That can only be worked out by knowing what the nominal price per share is, and I don't know what that is.

Edited August 22, 2022 by PurpleCanary

[littleyellowbirdie 2,510]

3 hours ago, ricardo said:

From the announcement of a General Meeting where the proposal to issue  ten million C preference shares is to be discussed. I expect he is the prospective buyer.

How many shares currently exist in the club? What do the preferences means (c preference)?

[Graham Paddons Beard 2,424]

1 hour ago, PurpleCanary said:

Just to emphasise this point, when Foulger bought 80,000 or so new ordinary shares several years ago they will have had a nominal value of £1 but he didn't pay only £80,000 for them. I am sure it was a six-figure sum.

So ….. the following question will now slip into City folklore. 

How much will Foulger wallet? 

[Jim Smith 2,314]

11 minutes ago, littleyellowbirdie said:

How many shares currently exist in the club? What do the preferences means (c preference)?

There are 617,000 ordinary shares of which D&M own 327,109.

Foulger(s) owns 98,200 ordinary shares (18%) which it is assumed he is acquiring.

The C preference shares are different in that they sit alongside the oridinary shares and bring rights to dividends etc but they do not bring voting rights so they do not change the above equation. 

[sgncfc 1,221]

There are lots of very interesting ways in which we can try to guess what the Board's intention is, but in all honesty we don't know yet. The EGM and the changes to the Articles is just the mechanism to enact what their plan is.

It still could be that a new Director will buy the C shares, or some of them, but we don't know how many will be bought. If they issue 10,000,000 of them, the conversion option seems to indicate a £100m valuation overall (given that the conversion option is to 10% of the Ordinary Shares). The issue of the C shares is effectively diluting the present value of the current O shares - remember that when you vote, but of course it will go through anyway because the majority shareholders are in favour.

The option to issue the shares expires on 31st December - that seems to indicate that the plan (whatever it is) is agreed. 

It could be that Michael Foulger is selling his O shares but still wants an interest so will buy some C shares which have a limited and guaranteed 7 year life before he can take his money back. If he sells his current holding (98,200) for about £16m based on a total value of £100m, he could re-invest some of that at 7%. Not a bad pension.

The C shares are effectively a fixed term investment (and a very good one) - I doubt they will give existing shareholders any rights to buy some but I'd be very happy to!

Personally I think the Attanasio deal is bigger than £10m, and that this figure is a bit of a red herring. If he doesn't bring enough to the table to both buy out Foulger and underwrite a City Stand expansion I will be surprised.

The overall value of £100m is also interesting - a bit low, I think, given the current squad value and the ground/Colney etc. So that might be another part of the plan - to agree that low valuation to make the investment/loans more attractive.

[nutty nigel 7,509]

8 minutes ago, Jim Smith said:

There are 617,000 ordinary shares of which D&M own 327,109.

Foulger(s) owns 98,200 ordinary shares (18%) which it is assumed he is acquiring.

The C preference shares are different in that they sit alongside the oridinary shares and bring rights to dividends etc but they do not bring voting rights so they do not change the above equation. 

This is lose/lose day for you Jimbo.

If you're right about this then you're wrong about people not being prepared to invest without control.

If you're wrong about this then you're wrong about the dolls house and train sets.

Best to watch it play out...

👀

 

[Ren 75]

I always though these new shares were to be sold at £100 each.  This would give the new shareholder 100,000 C shares which as highlighted in the special resolution document could then be converted to ordinary shares.  

This looks far more likely than 10,000,000 new shares being issued! 

Edited August 22, 2022 by Ren

[Jim Smith 2,314]

This may be a silly question but surely if they are asking shareholders to vote on the issue of these new shares then there should be some form of explanation to the shareholders as to how the arrangement with Attansio is intended to work in the context of the resolutions they are asking shareholders to pass? Or will they do that at the meeting. Otherwise how are we supposed to make an informed vote? I know there is a briefing note on what the shares are etc with the letter but it doesn;t actually explian what they are then proposing to do does it?

[nutty nigel 7,509]

Are you around @MrBunce

Any insights?

[shefcanary 2,388]

Yes, the actual "plan" is missing from the paperwork which tells us about a mechanism being available for certain things to happen. SGNCFC has highlighted something that I hadn't really expected, and that someone other than Attanasio might be able to buy the C shares. This means my previous post may just a little too simplified as there are potentially other complications arising from other interested parties (but see my conclusion below).

I've scanned the terms for the Conversion of the C shares into ordinary shares which I attach, as well as the definition of the "Trigger Event", which is the interesting part of the document sent out today.

I'm a little worried I may have got the wrong end of the stick about what the conversion right is; the relevant sentence is

"shall have the right (but not the obligation) to convert its issued and outstanding C Preference shares into a number of shares of Ordinary Shares equal to ten per cent. (10%) of all the issued and outstanding Ordinary Shares (on a fully diluted basis) as of such time (collectively, the Preferred C Share conversion)."

Does this mean the C Shares conversion only gets their holder 10% of total authorised ordinary shares, rather than a conversion of 10 C shares into 1 ordinary share which is newly issued? Can others help me out here? The wording is clumsy to me. 

The Trigger Events are interesting and I've made some analysis of what I think this means:

(a) relates almost certainly to Smith & Jones either selling their share (presumably planned to be to Attanasio), or god forgive them passing away before completion of the "plan",

(b) must be a catch all provision that someone else comes along that makes an offer that cannot be refused (say £500m plus!),

(c) a clause if Smith & Jones should come up with another way of disposing of their shares other than to Attanasio against his wishes;

(d) relates to the fact that Attanasio may be able to purchase the remaining shares not owned by Smith & Jones and thus would be able to accelerate the timing of the "plan";

(e) seems to be a variation of (a) above;

(f) & (g) let's not go there

(h) I'm struggling to see why this is contemplated given the existence of the "plan", but again assume a catch all clause.

So despite SGNCFC contemplating other third parties being involved in the allotment of the C shares, to my mind the nature of the Trigger Events that lead to a conversion are set up on the premise that only one person gets the C shares, and that that person ultimately will seek to exercise their right to become the major shareholder! Albeit that Clause (viii) contemplates there may be multiple owners of the C shares.  

But of course I could have misread the intentions. We just need to understand what the "plan" is, but I think it can only be that subject to a period of hands on due diligence by Attanasio, to all intents and purposes at some point in the near future he will hold close to 80% of the shares in the club and Smith & Jones will retain some form of shareholding (and no doubt places on the Board for a while) but will have effectively handed over the club to Attanasio.  

Oh to be able to attend the meeting!

 

 

[ncfcstar 287]

9 minutes ago, shefcanary said:

 

I'm a little worried I may have got the wrong end of the stick about what the conversion right is; the relevant sentence is

"shall have the right (but not the obligation) to convert its issued and outstanding C Preference shares into a number of shares of Ordinary Shares equal to ten per cent. (10%) of all the issued and outstanding Ordinary Shares (on a fully diluted basis) as of such time (collectively, the Preferred C Share conversion)."

Does this mean the C Shares conversion only gets their holder 10% of total authorised ordinary shares, rather than a conversion of 10 C shares into 1 ordinary share which is newly issued? Can others help me out here? The wording is clumsy to me. 

 

This reads to me that if you purchase/defer purchase of the C shares then at a time in the future you can then convert them to 10% of any Ordinary Shares that are currently unallocated + whatever portion that would remain from existing issued shares to hit 10%.

[Graham Paddons Beard 2,424]

.

Edited August 22, 2022 by Graham Paddons Beard

[BigFish 1,986]

11 minutes ago, ncfcstar said:

This reads to me that if you purchase/defer purchase of the C shares then at a time in the future you can then convert them to 10% of any Ordinary Shares that are currently unallocated + whatever portion that would remain from existing issued shares to hit 10%.

Firstly, it appears that when the motion passes there ceases to be any allocated shares. Secondly, it can be assumed that the sole purpose of this is to protect (wisely) the American's investment, both actually and in the eevnt of hypotheiticals. In the absence of the actual plan too many people are reading too much into this.

[king canary 7,580]

This is one of those threads where I keep reading things and realise I haven't a scooby about what most of this means. Can someone nudge me once it's all done?

[hogesar 9,618]

2 minutes ago, king canary said:

This is one of those threads where I keep reading things and realise I haven't a scooby about what most of this means. Can someone nudge me once it's all done?

This is the most important bit for Pinkun Banter / Politics purposes 😀

2 hours ago, nutty nigel said:

This is lose/lose day for you Jimbo.

If you're right about this then you're wrong about people not being prepared to invest without control.

If you're wrong about this then you're wrong about the dolls house and train sets.

Best to watch it play out...

👀

 

 

[The Raptor 1,199]

On 19/08/2022 at 18:29, Mr Apples said:

Can't wait for the introduction of the 70th minute stretch, along with a rousing rendition of 'Take me out to the Ball Game'. 🤣

Apples

There was a mascot fight at a hockey game I went to. We definitely need more of that. The only thing I can remember at Carrow Road was a dance off between CC and the Arsenal mascot.  I'd like to see Captain Canary go up against those idiot Ipswich horses or that weird squid thing at Southend. 

[Graham Paddons Beard 2,424]

A laymans take .

Everything has an intention. There seem "intentions" all over this transaction and we can get lost in the detail .

As I have said before , and it is stating the obvious  Attanasio isn’t going to be a minority shareholder for ever. He wouldn’t be interested.

I suspect the C share issue is a way to change very little for D and M . No voting rights are assigned but  a generous return on any investment. The shareholding is not diluted. Nothing changes.

The Trigger Events are the bit that keeps Attanasio in the game. It has to involve 50% or more of the ordinary (voting) shares which obviously points to D and M’s holding . This must be the intention – effectively a “side deal” that often exists in these circumstances.  Whilst not confirming anything, especially price , it does seem to give Attanasio a clear path to gain a controlling interest, as and when an effective change of ownership of the company occurs (i.e. involving D and M's shareholding)  Otherwise he cannot gain control even by buying every other share there is. The holder of the C shares also has the right Not to exercise the conversion rights. This is also in Attanasio’s favour.

I've read the whole thing as Attanasio being invited in, sitting on the board, getting a form of “first refusal” should a trigger event occur on the company which is not compulsory.

As well as protecting todays status quo, the future looks quite loaded in Attanasio’s favour , which is no surprise as I just can't see him doing it otherwise. Also it means that D and M’s favoured purchasers have first refusal too, which is their favoured position.

Of course I could be horribly wrong.

[PurpleCanary 5,554]

This may be covered in the documentation shareholders have been sent, but I can find no past reference in the accounts to C Preference shares. Presumably this C class is being created for this purpose, whatever this exact purpose is!

The Ordinary shares and the A and B Preference shares all have a nominal value of £1, so it is possible these Cs will too. If so then the resolution does allow for the allocation of 10m of them, given that the aggregate nominal value is £10m.