194,512 New Shares - a Theory

[GMF 275]

42 minutes ago, PurpleCanary said:

Shef, I would be prepared to bet that at the least Attanasio will break the 30 per cent mark and so have to make an offer for all the other shares.

It would be a bigger surprise if he didn’t and then the real fun starts! 

Edited February 6 by GMF
Typo

[essex canary 229]

39 minutes ago, GMF said:

MF (98,000) plus ex-Jones (23,278) plus old Trust (10,219) plus Carter’s (7,500) = 138,997. Add in the 194,512 would give MA 333,509. 

Following @shefcanarytheory, a similar number or slighty more will be acquiry from S&J surrendering around 75% of their holdings and a fairly similar percentage of the minorities being likewise surrendered.

Presumably the Canaries Trust will stay in?

Edited February 6 by essex canary

[GMF 275]

Maybe I’m going to be completely surprised, but there’s absolutely nothing to suggest that D&M will be passing on some of their shares. Time will tell, I guess. 

[Graham Paddons Beard 1,744]

I thought that with these shares , the shares already purchased by MA and the dilution of the shares caused by the additional issue , MA ends up with 40% ish and D and M are no longer over 51%? 
Im relying on the good folks on this board for this - have I got this right ? 
There ain’t any suggestion that D and M sell any shares is there? 

[GMF 275]

1 hour ago, shefcanary said:

As I have said elsewhere, my view is:

• The 194,512 shares will be bought by Attanasio at par (i.e. he will pay just £194,512 for these shares). 

I can imagine the sense of rage if they’re issued at the notional value - the inheritors will be vexed and bemoaning that the Club has been picked up on the cheap! (Smiling emoji) 

[essex canary 229]

34 minutes ago, GMF said:

Maybe I’m going to be completely surprised, but there’s absolutely nothing to suggest that D&M will be passing on some of their shares. Time will tell, I guess. 

Other than @shefcanary 's theory.

[essex canary 229]

5 minutes ago, GMF said:

I can imagine the sense of rage if they’re issued at the notional value - the inheritors will be vexed and bemoaning that the Club has been picked up on the cheap! (Smiling emoji) 

The way the motion is expressed that could be a distinct possibility.

My late friend and I expressed our rage at this Johnsonian principle at the 2016 AGM documented in the Historical Trusts recent Archive publication. Premium share charges for ordinary supporters that don't apply to Directors. A principle that is in danger of moving even further in that direction in the event of the vast bulk of MA's investment being interest bearing in his favour.

Thus the rage concerns the socialists conversion to Johnsonianism.

[GMF 275]

1 minute ago, essex canary said:

The way the motion is expressed that could be a distinct possibility.

My late friend and I expressed our rage at this Johnsonian principle at the 2016 AGM documented in the Historical Trusts recent Archive publication. Premium share charges for ordinary supporters that don't apply to Directors. A principle that is in danger of moving even further in that direction in the event of the vast bulk of MA's investment being interest bearing in his favour.

Thus the rage concerns the socialists conversion to Johnsonianism.

In my opinion, there’s a heck of a difference between what happened back in 2016, issuing the minimum 100 shares at notional value to EB and TS and this scenario, where the main objective is to raise capital in order to strengthen the balance sheet. Adding less than £200k in the circumstances would be a complete nonsense. Just a personal opinion of course.

[littleyellowbirdie 1,534]

18 hours ago, A Load of Squit said:

If you add 1+9+4+5+1+2 you get 22.

If you add 2+2 you get 4.

Makes you think.

I like your numerological approach. There are things about the number 4 that could arguably be good characteristics in a football club.

https://www.numerology.com/articles/about-numerology/single-digit-number-4-meaning/

[essex canary 229]

11 minutes ago, GMF said:

In my opinion, there’s a heck of a difference between what happened back in 2016, issuing the minimum 100 shares at notional value to EB and TS and this scenario, where the main objective is to raise capital in order to strengthen the balance sheet. Adding less than £200k in the circumstances would be a complete nonsense. Just a personal opinion of course.

Absolutely agree and hope you are right. I can entirely see where you are coming from though equally the thin end of a wedge can give a pointer to future behaviour.

[shefcanary 1,267]

1 hour ago, GMF said:

In my opinion, there’s a heck of a difference between what happened back in 2016, issuing the minimum 100 shares at notional value to EB and TS and this scenario, where the main objective is to raise capital in order to strengthen the balance sheet. Adding less than £200k in the circumstances would be a complete nonsense. Just a personal opinion of course.

My theory is based on what happened at the Brewers where Attanasio really didn't invest that much, but managed still to kick start a sea change in performance and off field activity. You say my theory shows an investment of less than £200K, but are you saying the lending of potentially £50m is not an investment, albeit one that eventually he recoups? I'm not having a dig, but the issue we did so little business in January was because we could not use the parachute payments. The lending by Attanasio of some spare cash he has laying around in one of his companies at a reasonable (for now) interest rate to free up the parachute payments, seems a reasonable investment for the time being? 

My theory also relies on the fact that Smith & Jones are prepared to relinquish control, being worn out emotionally by the ups and downs of recent years. Your earlier response would suggest there is more fight in the old couple yet?

[Mr Angry 1,249]

All the speculation about 194512 is wrong, it’s clearly a reference to a date, 1st February 1945-I just haven’t worked out the relevance of the date yet.

[PurpleCanary 4,278]

54 minutes ago, shefcanary said:

My theory is based on what happened at the Brewers where Attanasio really didn't invest that much, but managed still to kick start a sea change in performance and off field activity. You say my theory shows an investment of less than £200K, but are you saying the lending of potentially £50m is not an investment, albeit one that eventually he recoups? I'm not having a dig, but the issue we did so little business in January was because we could not use the parachute payments. The lending by Attanasio of some spare cash he has laying around in one of his companies at a reasonable (for now) interest rate to free up the parachute payments, seems a reasonable investment for the time being? 

My theory also relies on the fact that Smith & Jones are prepared to relinquish control, being worn out emotionally by the ups and downs of recent years. Your earlier response would suggest there is more fight in the old couple yet?

I believe they have decided to give up control, and to Attanasio. But I have no idea about a timeframe. They may hang on longer than you want!

As for Attanasio almost certainly passing the 30 per cent point, that will reveal the highest price he has paid so far, and must offer to the rest. Is that figure then the the one by which the club should be valued, or a figure  - if different - calculated on the conversion of C Preference shares into Ordinaries? I don't know the answer!

[SwearyCanary 905]

It’s our new projected attendance once the FCR expansion goes ahead 

[shefcanary 1,267]

55 minutes ago, PurpleCanary said:

I believe they have decided to give up control, and to Attanasio. But I have no idea about a timeframe. They may hang on longer than you want!

As for Attanasio almost certainly passing the 30 per cent point, that will reveal the highest price he has paid so far, and must offer to the rest. Is that figure then the the one by which the club should be valued, or a figure  - if different - calculated on the conversion of C Preference shares into Ordinaries? I don't know the answer!

Ooh, could you share more about your knowledge that Smith & Jones have decided to give up control? It is at odds to GMF's statement earlier on this thread.

The valuation of the conversion of the C Preference shares is a done deal; it is £10m and cannot be changed as it is what has been paid to the club. Ipso facto ...

Yes as soon as Attanasio passes 30%, the maximum price he has paid (presumably to one of Foulger's connections if not by the £10m paid for 10% of the share capital) is what must be offered if he wants to buy up more shares from the rest of the minority share holders.

[PurpleCanary 4,278]

1 minute ago, shefcanary said:

Ooh, could you share more about your knowledge that Smith & Jones have decided to give up control? It is at odds to GMF's statement earlier on this thread.

The valuation of the conversion of the C Preference shares is a done deal; it is £10m and cannot be changed as it is what has been paid to the club. Ipso facto ...

Yes as soon as Attanasio passes 30%, the maximum price he has paid (presumably to one of Foulger's connections if not by the £10m paid for 10% of the share capital) is what must be offered if he wants to buy up more shares from the rest of the minority share holders.

Shef, I don't have any firm inside information - sorry! - but it seems clear that S&J have settled on Attanasio and I strongly believe his intention is to take control. But as I said, I don't know what their timeframe is, or his, and whether they coincide. And I certainly don't know how Attanasio will gain control.

I don't think that is at odds with GMF's post, since Attanasio can become the majority shareholder without S&J reducing their holding in absolute - as opposed to percentage - terms.

[Parma Ham's gone mouldy 1,491]

6 hours ago, shefcanary said:

As I have said elsewhere, my view is:

• The 194,512 shares will be bought by Attanasio at par (i.e. he will pay just £194,512 for these shares). 
• I also assume Attanasio has acquired enough of Foulger's friends minority share holding already to hold around 24% of current shares;
• Attanasio will acquire shares from Smith & Jones, which on completion of the transactions next week leaves them with about 10% of the new enlarged shareholding, in order for them to retain some form of say in the running of the club albeit diminished;
• The above transaction with be a trigger event, thus converting Attanasio's C Preference Shares into Ordinary shares;
• As a result I expect Attanasio's shareholding will be just over 85%, Smith & Jones about 10%, with other minority shareholders (including myself) holding the balance. 
• Now having effective control of the club, Attanasio will advance money to the club in the form of a loan (probably via one his many companies), to pay off the remainder of the £65m short term loans taken out against the security of parachute payments. The new loan will be for the long term so as to improve the financial stability of the club, will not be securitised in anyway, but will no doubt have a coupon rate of 8-10%.
• The clearance of the short term loans will mean the parachute payments when received are now available for team building. It is the parachute monies alone that will be used for team building in the short term, so no major step change in what happens in recruitment.

I'm not going to bet on this being the outcome next week, but I'd be very surprised and potentially a little upset if it didn't pan out this way.

Good Shef

As for the bit in bold, worth noting that in finance - unlike other industries - loans are sales (and assets used as collateral are classed as liabilities).

Re-financing is a dream ‘sale’ in my world. The only question is ‘what is your risk?’. Internal due diligence a great way to amortise any risk. If you are inside the company it will very likely pay back correctly n’est-ce pas?

So you could ‘spend’ money from company A and reduce tax, whilst simultaneously making good sales by ‘loaning’ money (upon which interest is net profit - if paid back. More likely if you control the company of course) from Company B.

Nothing wrong with any of this of course. Though worth bearing in mind if you think of loans as ‘generous gifts from benefactors’. 

Parma 

[essex canary 229]

1 hour ago, PurpleCanary said:

Shef, I don't have any firm inside information - sorry! - but it seems clear that S&J have settled on Attanasio and I strongly believe his intention is to take control. But as I said, I don't know what their timeframe is, or his, and whether they coincide. And I certainly don't know how Attanasio will gain control.

I don't think that is at odds with GMF's post, since Attanasio can become the majority shareholder without S&J reducing their holding in absolute - as opposed to percentage - terms.

The last paragraph is another plausible theory that the best price paid so far will be sufficient to secure around half of the remaining minorities to secure a majority.

[GMF 275]

1 hour ago, PurpleCanary said:

Shef, I don't have any firm inside information - sorry! - but it seems clear that S&J have settled on Attanasio and I strongly believe his intention is to take control. But as I said, I don't know what their timeframe is, or his, and whether they coincide. And I certainly don't know how Attanasio will gain control.

I don't think that is at odds with GMF's post, since Attanasio can become the majority shareholder without S&J reducing their holding in absolute - as opposed to percentage - terms.

I don’t think it’s at odds at all, either.

I’ve indicated how MA could become the largest (minority) shareholder from this particular transaction, but that’s dependent upon other minority interests previously acquired, and not yet disclosed.

To secure a majority position will require, either the conversion of his C-preference shares or a purchase some / all of D&M’s shares.

Edited February 6 by GMF
Typo

[GMF 275]

7 hours ago, shefcanary said:

As I have said elsewhere, my view is:

• The 194,512 shares will be bought by Attanasio at par (i.e. he will pay just £194,512 for these shares). 
• I also assume Attanasio has acquired enough of Foulger's friends minority share holding already to hold around 24% of current shares;
• Attanasio will acquire shares from Smith & Jones, which on completion of the transactions next week leaves them with about 10% of the new enlarged shareholding, in order for them to retain some form of say in the running of the club albeit diminished;
• The above transaction with be a trigger event, thus converting Attanasio's C Preference Shares into Ordinary shares;
• As a result I expect Attanasio's shareholding will be just over 85%, Smith & Jones about 10%, with other minority shareholders (including myself) holding the balance. 
• Now having effective control of the club, Attanasio will advance money to the club in the form of a loan (probably via one his many companies), to pay off the remainder of the £65m short term loans taken out against the security of parachute payments. The new loan will be for the long term so as to improve the financial stability of the club, will not be securitised in anyway, but will no doubt have a coupon rate of 8-10%.
• The clearance of the short term loans will mean the parachute payments when received are now available for team building. It is the parachute monies alone that will be used for team building in the short term, so no major step change in what happens in recruitment.

I'm not going to bet on this being the outcome next week, but I'd be very surprised and potentially a little upset if it didn't pan out this way.

I’ve wrestled with the various definitions of trigger events, in relation to the C-preference shares, before without coming to a definitive conclusion. However, these seem to be drafted with specific reference to the sale of a majority interest (there’s only one) and as a defence mechanism to avoid the possibility of MA being disadvantaged by any such future sale.

If this proposal is approved, D&M’s interest will become a minority stake and all these trigger provisions will no longer apply. At least that’s how I’m reading it, but will be interested as to how others interpret them.

[PurpleCanary 4,278]

31 minutes ago, GMF said:

I don’t think it’s at odds at all, either.

I’ve indicated how MA could become the largest (minority) shareholder from this particular transaction, but that’s dependent upon other minority interests previously acquired, and not yet disclosed.

To secure a majority position will require, either the conversion of his C-preference shares or a purchase some / all of D&M’s shares.

GMF, or at some point the creation of new Ordinaries.

[littleyellowbirdie 1,534]

Has anyone considered the possibility that they chose 194,512 as an oddly specific number precisely to trigger this sort of debate as misdirection for some evil, dastardly plan, possibly involving wars between the deep state and the shadow government? Could there be an 4n4l probe involved?

 

[TeemuVanBasten 3,303]

2 hours ago, Parma Ham's gone mouldy said:

Good Shef

As for the bit in bold, worth noting that in finance - unlike other industries - loans are sales (and assets used as collateral are classed as liabilities).

Re-financing is a dream ‘sale’ in my world. The only question is ‘what is your risk?’. Internal due diligence a great way to amortise any risk. If you are inside the company it will very likely pay back correctly n’est-ce pas?

So you could ‘spend’ money from company A and reduce tax, whilst simultaneously making good sales by ‘loaning’ money (upon which interest is net profit - if paid back. More likely if you control the company of course) from Company B.

Nothing wrong with any of this of course. Though worth bearing in mind if you think of loans as ‘generous gifts from benefactors’. 

Parma 

The idea that he could just loan the club a fortune from another company that he has a stake in is rather quite fanciful.

He was, for example, one of three co-founders of Crescent Capital, two of them remain (one being our man). Yet people talk like it is his business. They sold a 51% stake in Crescent Capital to Sun Life Financial in 2021.

Even assuming that the third founder reliquinished all of his stock, and assuming no other investors, and assuming they've not dished out stock options to employees over the years (all unlikely scenarios), the most he will now own of Crescent Capital is likely to be half of 49%. Yet people on here are constantly suggesting that he can just waltz into his office and write a huge eight figure cheque to fund his side business.

https://www.prnewswire.com/news-releases/sun-life-completes-majority-acquisition-of-crescent-capital-group-lp-301201481.html

If anything he's cash rich because he and his co-founders sold 51% of the equity in that business, for up to $338 million.

If we estimate that the $338 million was split three ways amongst the three founders (optimistic, for reasons set out above), that means he benefitted to the tune of over $110m.

Clearly that's what he's using to find his foray into English football. That's the source of cash. He can't advance us ludicrous sums of money from businesses that he doesn't even control and people seriously need to stop speculating that he could. 

Edited February 6 by TeemuVanBasten

[Parma Ham's gone mouldy 1,491]

Finance companies provide loans which appear as sales on their books. 

They are shops selling money @TeemuVanBasten

It is quite normal (though different from ‘normal’ businesses of course ).

Attanasio is proposing to refinance the existing Norwich City loans (advanced in effect on parachute payments due to be received at a future point), by paying off the current loans - to a 3rd party - via providing new loans from one of his companies (to Norwich City, who become a client of that company). 

This reduces (or should reduce) the interest that Norwich City pay out each month, thus freeing up the difference as ‘cash’ that is available. 

The new loans will likely carry interest payments to his company though. That company is thus making a sale and a profit from providing those loans. They are simply prepared to do it at a lower rate - or take on more risk if you will - than the original 3rd party provider.  

Parma 

Edited February 6 by Parma Ham's gone mouldy

[TeemuVanBasten 3,303]

6 minutes ago, Parma Ham's gone mouldy said:

Finance companies provide loans which appear as sales on their books. 

They are shops selling money @TeemuVanBasten

It is quite normal (though different from ‘normal’ businesses of course ).

Attanasio is proposing to refinance the existing Norwich City loans (advanced in effect on parachute payments due to be received at a future point), by paying off the current loans - to a 3rd party - via providing new loans from one of his companies (to Norwich City, who become a client of that company). 

This reduces (or should reduce) the interest that Norwich City pay out each month, thus freeing up the difference as ‘cash’ that is available. 

The new loans will likely carry interest payments to his company though. That company is thus making a sale and a profit from providing those loans. They are simply prepared to do it at a lower rate - or take on more risk if you will - than the original 3rd party provider.  

Parma 

Oh OK, didn't realise this wasn't just speculation.

Marcus Evans did similar at Ipswich, only he charged more interest than banks! 

[essex canary 229]

1 hour ago, GMF said:

I’ve wrestled with the various definitions of trigger events, in relation to the C-preference shares, before without coming to a definitive conclusion. However, these seem to be drafted with specific reference to the sale of a majority interest (there’s only one) and as a defence mechanism to avoid the possibility of MA being disadvantaged by any such future sale.

If this proposal is approved, D&M’s interest will become a minority stake and all these trigger provisions will no longer apply. At least that’s how I’m reading it, but will be interested as to how others interpret them.

How does this square the circle of MF apparently having accepted £3 million for approx 16% of the Club whilst based on the C preference conversion presumably D&M would get £10 million for 10%? 

[shefcanary 1,267]

56 minutes ago, essex canary said:

How does this square the circle of MF apparently having accepted £3 million for approx 16% of the Club whilst based on the C preference conversion presumably D&M would get £10 million for 10%? 

You know it doesn't Essex. Is the circle really a torus that can't be squared? Or did Bailey get it wrong (for once)?

[Canary Jedi 468]

On 05/02/2023 at 22:04, The Raptor said:

I stand corrected. How did I mess that up?! I'll never be a jedi!

Hmmm…The force is $hite in you…

[chicken 2,182]

2 hours ago, TeemuVanBasten said:

Oh OK, didn't realise this wasn't just speculation.

Marcus Evans did similar at Ipswich, only he charged more interest than banks! 

That's because he's an arms dealer... 

[GMF 275]

11 hours ago, essex canary said:

How does this square the circle of MF apparently having accepted £3 million for approx 16% of the Club whilst based on the C preference conversion presumably D&M would get £10 million for 10%? 

There’s no proof that £3m was the actual consideration and there’s unlikely to be given that it’s a private transaction.

The C-preference conversion, assuming it happens, is a different matter, but the average price per share is going to reduce, given that there will be a higher number of ordinary shares in comparison to when the deal was originally announced.