New Board Director Confirmed - Mark Attanasio

[PurpleCanary 5,562]

6 minutes ago, Greavsy said:

 

Not sure if MD is ITK - but hes certainly close to Delia and MWJ! 

Some interesting replies on there too.  

I had noticed that there hasn't been a story on this significant development.

[cornish sam 953]

On 22/08/2022 at 14:33, shefcanary said:

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!

Careful Mark, you've Doxed yourself there....

 

But thank you for posting your informed opiniion for us layman, non-shareholders.

Edited August 23, 2022 by cornish sam

[A Load of Squit 5,164]

12 minutes ago, Greavsy said:

 

Not sure if MD is ITK - but hes certainly close to Delia and MWJ! 

Some interesting replies on there too.  

Later on in the thread there's a reply from Connor S which says they are looking into it & they want to get facts straight before they report on it, possibly an admission that like most of us they are getting all of this translated into English before they start to write about it. 😀

[Greavsy 2,415]

5 minutes ago, A Load of Squit said:

Later on in the thread there's a reply from Connor S which says they are looking into it & they want to get facts straight before they report on it, possibly an admission that like most of us they are getting all of this translated into English before they start to write about it. 😀

agreed a couple of people from here have replied too - all very interesting. 

Personally, as im not a share holder, im leaving the grown ups to discuss this.  

[shefcanary 2,409]

9 minutes ago, cornish sam said:

Careful Mark, you've Doxed yourself there....

 

But thank you for posting your informed opiniion for us layman, non-shareholders.

I realised that after the fact but not too worried, I'm a retiree so beholden to no-one, if they come after me! 😉 

[TIL 1010 4,748]

1 hour ago, PurpleCanary said:

Quite right. You were wrong, or if that turns out to be the amount Attanasio does invest it will be a total fluke and not because you had inside info.

 

 

Would you like me to PM you Michael Foulgers mobile phone No then you can check out what i posted with him.You might just find out that my post was not a total fluke  As to how i have his number i will leave it to you to jump to assumptions and guesswork but no doubt you will bluster your way round that as well.

[shefcanary 2,409]

11 minutes ago, A Load of Squit said:

Later on in the thread there's a reply from Connor S which says they are looking into it & they want to get facts straight before they report on it, possibly an admission that like most of us they are getting all of this translated into English before they start to write about it. 😀

I can see involving "finance" people will slow things down. As a retired FD and Corporate finance exec I've given my interpretation of what is likely to happen, free of charge because it is heavily caveated as an opinion. However to give a formal opinion on it as Connor wants for his article then I can see all sorts of internal professional indemnity clearances required before such an opinion would be given to be quoted on in an article, just in case (given the ££££'s involved) it scuppered the deal one way or another with a misplaced assumption and a lawsuit resulted.

Whereas I believe there is only one realistic pathway (or "plan") in existence, when the story is published I'm sure there will be several potential "plans" discussed, but with a general acceptance that my belief isn't far from the truth.

[PurpleCanary 5,562]

8 minutes ago, A Load of Squit said:

Later on in the thread there's a reply from Connor S which says they are looking into it & they want to get facts straight before they report on it, possibly an admission that like most of us they are getting all of this translated into English before they start to write about it. 😀

I knew this morning that was the explanation, but to use a technical legal term that is total b*llocks. It is true some of what is being proposed is opaque, to put it mildly, and expert help would be useful.

But there is a very basic story there that doesn't need expert help. That the shareholders' meeting to approve Attanasio as a director will also be asked to approve the creation of a tranche of new shares, which if bought by Attanasio or indeed anyone else would put money into the club, in contrast to the deal to buy Foulger's shares, which benefits only Foulger.

That is simple and factual and doesn't rush to any assumptions. By not carrying anything the EDP looks as if it has no idea this has been announced. It is a ghastly error in news judgment. It is also an admission it doesn't have anyone on staff who understands business talk and share dealings.

[cornish sam 953]

2 minutes ago, PurpleCanary said:

I knew this morning that was the explanation, but to use a technical legal term that is total b*llocks. It is true some of what is being proposed is opaque, to put it mildly, and expert help would be useful.

But there is a very basic story there that doesn't need expert help. That the shareholders' meeting to approve Attanasio as a director will also be asked to approve the creation of a tranche of new shares, which if bought by Attanasio or indeed anyone else would put money into the club, in contrast to the deal to buy Foulger's shares, which benefits only Foulger.

That is simple and factual and doesn't rush to any assumptions. By not carrying anything the EDP looks as if it has no idea this has been announced. It is a ghastly error in news judgment. It is also an admission it doesn't have anyone on staff who understands business talk and share dealings.

Perhaps they just didn't get hold of the shareholders letter until relatively late, Archant did sell their shares recently so they must be relying on another shareholder for it....

[cornish sam 953]

12 minutes ago, shefcanary said:

I realised that after the fact but not too worried, I'm a retiree so beholden to no-one, if they come after me! 😉 

Fair enough, just as long as you know and are happy with it 🙂

[PurpleCanary 5,562]

10 minutes ago, cornish sam said:

Perhaps they just didn't get hold of the shareholders letter until relatively late, Archant did sell their shares recently so they must be relying on another shareholder for it....

Cornish, I would be surprised if none of the EDP journalists are shareholders, but that is not the excuse being given. As said, even without expert help there was a basic story that could and should have been written. Mick Dennis is quite right about this.

Edited August 23, 2022 by PurpleCanary

[shefcanary 2,409]

And hey presto, Connor's story is published.

What shareholder letters say about Mark Attanasio’s potential City involvement (pinkun.com)

To be fair, there is nothing new in the story that we haven't covered on here, apart from confirmation I sought over the 10% conversion and what it meant - Connor's people have confirmed the C shares can be converted into no more than 10% of the issued share capital. 

"In seven years’ time, or upon certain trigger events, those can be redeemed into conventional shares, although the documentation says, in this instance, that conversion is to a maximum of 10 per cent of ordinary issued share capital. "

So it is as he concludes only the beginning of the story and still a lot of unanswered questions of what has been agreed so far, for instance: Will the C shares be made available to others? How much will Attanasio pay for his C Shares? How many shares has he acquired already from Foulger and / or others?

🤷‍♂️

Edited August 23, 2022 by shefcanary

[Diane 500]

11 minutes ago, PurpleCanary said:

I knew this morning that was the explanation, but to use a technical legal term that is total b*llocks. It is true some of what is being proposed is opaque, to put it mildly, and expert help would be useful.

But there is a very basic story there that doesn't need expert help. That the shareholders' meeting to approve Attanasio as a director will also be asked to approve the creation of a tranche of new shares, which if bought by Attanasio or indeed anyone else would put money into the club, in contrast to the deal to buy Foulger's shares, which benefits only Foulger.

That is simple and factual and doesn't rush to any assumptions. By not carrying anything the EDP looks as if it has no idea this has been announced. It is a ghastly error in news judgment. It is also an admission it doesn't have anyone on staff who understands business talk and share dealings.

If you understand it all, thats all well and good Purple but @GMF who most consider to be an expert on shares says in a tweet that the letter brings up questions which need answering so as to  clarify what it all means 

[PurpleCanary 5,562]

3 minutes ago, Diane said:

If you understand it all, thats all well and good Purple but @GMF who most consider to be an expert on shares says in a tweet that the letter brings up questions which need answering so as to  clarify what it all means 

Diane, I have been very clear that I don't understand it all, particularly on the conversion of shares, not least because I haven't yet received any documents. But there was a basic story that could and should have been published yesterday while trying to get clarity on the the more complicated aspects of this.

[Robert N. LiM 4,356]

Just now, PurpleCanary said:

Diane, I have been very clear that I don't understand it all, particularly on the conversion of shares, not least because I haven't yet received any documents. But there was a basic story that could and should have been published yesterday while trying to get clarity on the the more complicated aspects of this.

I'd be interested to know what you make of Connor Southwell's piece when you get a moment.

[wcorkcanary 4,334]

7 hours ago, TIL 1010 said:

What a ridiculous analogy.

Ethics? Never. 

[PurpleCanary 5,562]

8 minutes ago, Robert N. LiM said:

I'd be interested to know what you make of Connor Southwell's piece when you get a moment.

It certainly provides one useful piece of info I didn't have, which is that the nominal value of these C Preference shares is indeed £1, as it is with the club's other categories of shares. So that does mean the plan is to allocate up to 10m of these new shares.

[Mr Angry 1,561]

2 hours ago, sgncfc said:

The C shares could dilute existing shareholdings - either before or after conversion; depends whether they are included in equity calculations and on what basis. Also, the 7 year backstop applies as a trigger event for repayment (including 7% interest pa if not paid by then) or conversion. 

We can't possibly guess at what the deal is. This framework offers too many possibilities.

Which really means that we can't realistically vote on the resolutions. Normally in these situations there is an accompanying letter which outlines the proposal. In this case, there isn't.

So, because of that, and because I can't get to the meeting to find out what the plan is, I will be voting "no". Which will really put the cat among the pigeons, obviously, with my 40 shares in the "no" column against D & M/Foulgers 420,000 or so.

**** me, it IS Brexit again 🤣

Edited August 23, 2022 by Mr Angry
Is F E C K not allowed anymore?

[Robert N. LiM 4,356]

Just now, Mr Angry said:

**** me, it IS Brexit again 🤣

Haha. We need a Malthouse Compromise 🤪

[Bert 236]

The biggest disappointment in the details released so far is that there is not a clear path nor timeline to move ownership from the stow market 2 to the Americans 

[PurpleCanary 5,562]

41 minutes ago, Robert N. LiM said:

I'd be interested to know what you make of Connor Southwell's piece when you get a moment.

It seems a decent run through of the factual stuff, such as explaining that the actual price that will be paid for these shares is likely to be different to - ie higher than - the nominal price. And he doesn't fall into the trap of thinking this means Attanasio is putting a definite £10m into the club...😍

There is one phrase that I am unsure about, where he talks about giving the directors the power to convert these C shares into equity in the future. Shares are equity, but there may be some wrinkle or nuance there I don't get.

[Jim Smith 2,319]

50 minutes ago, PurpleCanary said:

It certainly provides one useful piece of info I didn't have, which is that the nominal value of these C Preference shares is indeed £1, as it is with the club's other categories of shares. So that does mean the plan is to allocate up to 10m of these new shares.

It also, presumably, means that if they are sold for £100 as is the case with the other shares, they potentially enable £1,000,000,000 of investment into the club  not just £10m! 

[GMF 744]

Well, it’s certainly getting interesting, isn’t it! 😉

[PurpleCanary 5,562]

33 minutes ago, Jim Smith said:

It also, presumably, means that if they are sold for £100 as is the case with the other shares, they potentially enable £1,000,000,000 of investment into the club  not just £10m! 

Yes, we would join the billionaires' club...😎

[A Load of Squit 5,164]

18 minutes ago, PurpleCanary said:

Yes, we would join the billionaires' club...😎

Obviously we wouldn't be so gauche as to wave ten pound notes at other supporters. 😀

[Parma Ham's gone mouldy 2,220]

1 hour ago, PurpleCanary said:

It seems a decent run through of the factual stuff, such as explaining that the actual price that will be paid for these shares is likely to be different to - ie higher than - the nominal price. And he doesn't fall into the trap of thinking this means Attanasio is putting a definite £10m into the club...😍

There is one phrase that I am unsure about, where he talks about giving the directors the power to convert these C shares into equity in the future. Shares are equity, but there may be some wrinkle or nuance there I don't get.

I read it as indicating that any current investment in C shares by Attanasio could be rolled over into ‘ownership’ shares at a later date. ‘Equity in the company’ which ‘ownership’ shares are and these C shares aren’t (currently).

This set up currently has the C shares as a vehicle to inject cash into the company, with a sweetener-cover position of potentially receiving a 7% return. 

I would read this as a backstop position if the ‘due diligence period’ (for both sides) does not lead to the buyout opportunity that Attanasio is likely seeking. Thus he would receive 7% as a ‘golden goodbye’ (apology-comfort blanket), without this being the overt intention of either party (Or equally not a ‘bond scheme’ for open investment for other outside parties or ‘consumers’).

Parma 

Edited August 23, 2022 by Parma Ham's gone mouldy

[cornish sam 953]

2 hours ago, PurpleCanary said:

Cornish, I would be surprised if none of the EDP journalists are shareholders, but that is not the excuse being given. As said, even without expert help there was a basic story that could and should have been written. Mick Dennis is quite right about this.

To be honest, my suggestion was tongue in cheek, they would be pretty **** poor journalists if that was the case....

[MrBunce 245]

I don't have the documents so I am also finding it rather hard to follow. 

Reading the resolutions, they are not, in my opinion, well drafted. My wife, a corporate lawyer, also thought the drafting could be improved. 

My interpretation of the screenshots in this thread is that the C shares can be converted into a maximum of 10% of the ordinary shares. That seems to now be the consensus. 

Three thoughts not covered by other posters. 

1. Resolutions 2 and 3 are special resolutions. These require 75% of ordinary shareholders to pass. If, as speculated, MA has bought Foulger's shares, then that makes passing these special resolutions a formality (like the general, 50% ones). It is much easier done with Foulger 'onside'. 

2. I'm disappointed that the club hasn't been more transparent and clear about the purpose and nature of the resolutions. Resolution 2 and 3 are very important. They remove a very important right of us shareholders (pre-emption right, i.e. The right to participate in the equity raise and thus avoiding being diluted, resolution 2) and a change to the articles (i.e. The shareholder rules, resolution 3). The reason that these require a supermajority is to protect shareholders as these changes are significant. In this case, the shareholders are fans and custodians (albeit as a minority) of the club. In my view, the club is a community owned company. There's no obligation for the club to provide such explanatory information. However, it would be, a good thing to do, with little downside. This is especially the case because most fans/shareholders are not corporate lawyers or accountants or businesspersons. Just because this is a legal procedure, it doesn't mean it can't be leveraged into an opportunity. The fans care deeply about the club and want to understand what these significant changes mean. Good communication can turn this into something quite exciting for the club's supporters. 

3. The wording in the screenshots suggest to me that only MA, and more specifically a company he controls, is the sole purchaser of the C shares. This is because the drafting says "the holder" (rather than the holder(s)) and "its" rather than "theirs". This is potentially sloppy drafting. However, if I was putting money on it, then I would wager a corporate entity of MA's will be the sole holder of the C shares. 

[MrBunce 245]

2 hours ago, PurpleCanary said:

It seems a decent run through of the factual stuff, such as explaining that the actual price that will be paid for these shares is likely to be different to - ie higher than - the nominal price. And he doesn't fall into the trap of thinking this means Attanasio is putting a definite £10m into the club...😍

There is one phrase that I am unsure about, where he talks about giving the directors the power to convert these C shares into equity in the future. Shares are equity, but there may be some wrinkle or nuance there I don't get.

I don't have pinkun+. I would presume this is because the Club accounts class the A and B preference shares as a liability rather than equity in the accounts. I presume the C shares have similar terms. Under UK GAAP preference shares can be either equity or a liability. In the case of the A and B shares they are deemed by the Club to be 'liability like' so are accounted under Creditors in the accounts. I presume that what's referred to is the conversion right that would turn the C shares into ordinary shares which are classed as equity in the accounts. 

[essex canary 496]

1 hour ago, MrBunce said:

I don't have pinkun+. I would presume this is because the Club accounts class the A and B preference shares as a liability rather than equity in the accounts. I presume the C shares have similar terms. Under UK GAAP preference shares can be either equity or a liability. In the case of the A and B shares they are deemed by the Club to be 'liability like' so are accounted under Creditors in the accounts. I presume that what's referred to is the conversion right that would turn the C shares into ordinary shares which are classed as equity in the accounts. 

As there is a Companies Act reference in Resolution 2 that in itself makes reference to conversion to ordinary shares, that assessment seems logical.