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KeelansGlove

What would be a fair offer ?

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Ive touched on this before in other threads, just wondering what everyones point of view is regarding this matter.

Of course in an ideal world we would all love to see Delia and MWJ stay on sell some of the shares they own and get a decent recompence for what they have invested but I suppose it comes back to the question that has never really been answered what is NCFC worth ?

I have said before I am not particularly convinced that the current regime has added a significant amount to the value of the club over the last ten years whilst selling off the assets of land that were bought by Mr C but what are the nuts and bolts ?

Does anybody have the accounts to show the fixed asset values now compared to when they took over, and comparitive liabilities? Are the assets overstated ?

It is a sad fact in business that investments can go down as well as up, anybody that has owned shares in anything will tell you that.

Have any other championship clubs been sold recently that werent in administration ?

I do not deny that the current owners have done the best they can, but they have made mistakes along the way. What was the cost of Hamilton and Grant ?

What is the true value of the goodwill ? yes we have 25,000 fans turning up every week and this creates a potential revenue stream in terms of tickets , merchandise etc but has is this able to be quantified in value terms ?

The problem is this

If you bought a car and used it for a few years then came time to sell it you would look very hard at the depreciation, its very difficult to justify trade in prices because they dont seem to be "fair"

Dont forget we have a very large debt in tow 16M I believe and need investment on the pitch to keep the value of the club going (ie I think if we owned 11 players capable of giving us a shot at the playoffs we would be worth more)

So what is "Fair" ?

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KG, do you happen to know what the number of shares issued is?  As somebody as has previously pointed out on numerous other threads, if Cullum makes an offer to buy out the majority shareholding (how many is that?) then it is obliged to also make a similar offer to all other existing shareholders.If nothing else, knowing the total number of shares in circulation would allow people to frame the minimum amount of money that he would have to spend to get into the Club in the first place.

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[quote user="KeelansGlove"]

Does anybody have the accounts to show the fixed asset values now compared to when they took over, and comparitive liabilities? Are the assets overstated ?

[/quote]

mr.carrow would know exactly how much it is worth.

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[quote user="Nostradamus"][quote user="KeelansGlove"]

Does anybody have the accounts to show the fixed asset values now compared to when they took over, and comparitive liabilities? Are the assets overstated ?

[/quote]

mr.carrow would know exactly how much it is worth.

[/quote]

 

LOL! For God''s sake don''t get him started again!

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[quote user="astrodyne"]Yes, don''t get him started or poor Beausants true position will become exposed again......[/quote]

 

My true position being what,Astrodyne?

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DS and MWJ jointly own 327,000 shares out of a total of 535,000 shares as per the last published accounts. So at £30 a share, DS and MWJ''s  are worth £10 million.

Hypothetically speaking you would only need to own 268,000 shares to have a majority shareholding but since DS and MWJ own a lot more than that, you would have to buy at least some part of their shares...and in the real world, people never sell part of their shareholding but only sell all of it.

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According to the current "owners" a fair offer would be in the region of £56m to include the debt.

When Britain staggers out of a recession in three to four years time, the freehold of Carrow Road would be worth a fair bit if sold for redevelopment I would think.

Not that anyone would think of doing such a thing would they?[;)]

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There are about 540,000 shares based on the valuation of the club at £16m (shares) at £30 per share.

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This is been covered before. The normal business valuation rules do not apply to the majority of football clubs as they do not generate cash flows for the shareholders. Therefore you would normally look at what other football club of a similar size and financial position had been sold for, or the net assets as a minimum valuation basis. The net assets per the last published accounts were 16m so the quoted asking price of 16m for the shares looks about right. Alternatively you could look at the amount the shareholders had invested and add a basic rate of interest. You would need details of the timing and amount of the cash flow contributions for this but probably the 16m valuation on the shares is not too far out so 16m is probably a fair price. Ultimately though as others have been said before there is no market in the shares and therefore the price is what ever 2 parties agree.

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[quote user="Camuldonum"]

According to the current "owners" a fair offer would be in the region of £56m to include the debt AND THE £20m EXTRA INVESTMENT.

When Britain staggers out of a recession in three to four years time, the freehold of Carrow Road would be worth a fair bit if sold for redevelopment I would think.

Not that anyone would think of doing such a thing would they?[;)]

[/quote]Not like you Cam, you don''t normally miss bits.

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I looked at Portsmouth for a potential investor and the only reason for their interest was redeveloping the site so it is possible.

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Well, it''s certainly not a controlling interest for £20m which, if correctly reported, is what Mr C originally wanted. 

If he wants to be the majority shareholder he has to buy everyone else out - unless, of course, he is expecting the shareholders to hand over their shares for nothing.[:|]

 

 

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[quote user="Beauseant"][quote user="Nostradamus"][quote user="KeelansGlove"]

Does anybody have the accounts to show the fixed asset values now compared to when they took over, and comparitive liabilities? Are the assets overstated ?

[/quote]

mr.carrow would know exactly how much it is worth.

[/quote]

 

LOL! For God''s sake don''t get him started again!

[/quote]

<snigger> See this big spoon? It smells of.....

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[quote user="Camuldonum"]

Well, it''s certainly not a controlling interest for £20m which, if correctly reported, is what Mr C originally wanted. 

If he wants to be the majority shareholder he has to buy everyone else out - unless, of course, he is expecting the shareholders to hand over their shares for nothing.[:|]

 [/quote]

That''s not strictly true based upon the numbers already quoted in this thread for shares.  If there were 540,000 shares issued and he purchased all those shares for £30 each, he would only have paid £16.2M to take complete control of the PLC.

The other two financial pieces that muddy the water in all the discussions are:

  • the club debt of around £20M
  • the "pot of gold" for player investment, £20M
That would take the total to £56.2M.So back to your original comment, an investment of £20M would be enough to take control of the PLC with all existing debts and no investment into the playing staff. Those debts would include the interest free loans made to the club by Messrs Smith, Wynn-Jones and the Turners.See this is what is confusing to me. The impression given by media reporters and posters alike is that Delia wanted £56M from Cullum for the club, but there is no explanation of what that £56M went to. The figures above suggest that it was to buy the shares, wipe out the debt (what does Cullum get for that, btw) and still put £20M into the transfer budget (again what does Cullum get for that - just the warm fuzzy feeling in his heart that he made a difference, I think not).

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Morph, the club released a full breakdown of what the £56m would be

made up of, and it included the debt, a full takeover of shares and the

£20m PC had pledged to invest into the playing side.  Of course,

he could always renegotiate the debt with the banks and buy only a

controlling stake, and maybe invest less into the transfer budget if he

felt things were tight.  At the time, however, all we heard was

that he wanted to put £20m into the transfer kitty in return for

control of the club (albeit with his own people on the board and Delia

as a figurehead). 

This remains the most contentious point of it all for many, I believe -

if PC was serious about the club, why didn''t he make an offer? Some

suspect he saw which way the wind was blowing and decided to stir

things up and bide his time till he could take control for less

money.  Not saying this is true nor that I believe this, but its

still a bone of contention....

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[quote user="Evil Monkey"]Morph, the club released a full breakdown of what the £56m would be

made up of, and it included the debt, a full takeover of shares and the

£20m PC had pledged to invest into the playing side.  Of course,

he could always renegotiate the debt with the banks and buy only a

controlling stake, and maybe invest less into the transfer budget if he

felt things were tight.  At the time, however, all we heard was

that he wanted to put £20m into the transfer kitty in return for

control of the club (albeit with his own people on the board and Delia

as a figurehead). 

[/quote]EM, I stand corrected.My point to Canoldrum still stands though - Cullum could take control of the club with an investment of £20M, BUT that investment would only get him all the issued shares at £30 per share. The £20M would not erase the debt or provide a £20M pot of gold for transfers.

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The loans to the club have been set up and signed and agreed in such a way that they MUST be repaid if the club changers owners. That is how i understand it anyway. there are no ifs or buts, but they have to legally be repaid.

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The club releasing a figure which includes the debt and £20m transfer pot makes it look as though they are conditions of sale.  People forget that Delia and MWJ don`t have to sell at any price and nobody can force them to.  Given that they went to the trouble of posting the £56m breakdown on the official site (and we have had no other info since) it looks as though they are basically saying "We`ll sell you our shares at full-price, but you must legally agree to clear the debt and put in a £20m transfer pot". This must be unreasonable in anyones book imo.

Of course someone will respond with a "No, they`re not asking for that", but as usual we`re just speculating.......

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Quote user="whoareyou?"

"The loans to the club have been set up and signed and agreed in such a way that they MUST be repaid if the club changers owners. That is how i understand it anyway. there are no ifs or buts, but they have to legally be repaid."

Yes but a loan can be "repaid" by another financial intitution, just like switching mortgages.  Of course it could be that Delia and MWJ are asking for full repayment (rather than re-negotiation) as a condition of sale....

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[quote user="Mr.Carrow"]

Quote user="whoareyou?"

"The loans to the club have been set up and signed and agreed in such a way that they MUST be repaid if the club changers owners. That is how i understand it anyway. there are no ifs or buts, but they have to legally be repaid."

Yes but a loan can be "repaid" by another financial intitution, just like switching mortgages.  Of course it could be that Delia and MWJ are asking for full repayment (rather than re-negotiation) as a condition of sale....

[/quote]

I agree with you,Mr Carrow.The loans have to be addressed but not necessarily repaid.I believe that Peter Cullum addressed this point in the media,and said that he saw no reason why the loans would not be renegotiable.

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The Official Statement, as copied from the main website, from the Club, is below.

IMHO this doesn''t respresent a "take it or leave it" offer and I doubt whether the directors would call for an immediate repayment of their outstanding loans. The main debt may, legally, be repayable upon a change of ownership, but, as pointed out by another posting, there still remains opportunity for further negotiations with the bank on the point.

 

"In the light of headlines in this morning''s press we thought it would be helpful to supporters to share the process the club uses when evaluating any potential investment in Norwich City Football Club PLC.

We look at the individual, we look at what they want to achieve and we look at the financial viability of their proposition. In the case of someone seeking to take control of the club and at the same time invest £20 million in the playing squad this would take a minimum of £56 million made up as follows:
                       

Investment in playing squad                                                                               £20 million
Purchase of shares based on current share issue price of £30 per share              £16 million*
Repayment of bank debt that would be triggered by a change of control            £16 million
Repayment of directors'' loans                                                                           £4 million
                                                            TOTAL                                                £56 million

In the last 12 months we have talked to a number of potential investors. We have also reviewed a number of different propositions. Unfortunately none of these investors have made a proposal which we have considered financially viable. Notwithstanding this the board remains open minded about future investment and will continue to seek new investors and evaluate their propositions using the process described above.

*This figure is based on an offer for 100% of the issued share capital as required by the rules of the City Code which apply to Norwich City Football Club PLC."

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[quote user="Beauseant"][quote user="Mr.Carrow"]

Quote user="whoareyou?"

"The loans to the club have been set up and signed and agreed in such a way that they MUST be repaid if the club changers owners. That is how i understand it anyway. there are no ifs or buts, but they have to legally be repaid."

Yes but a loan can be "repaid" by another financial intitution, just like switching mortgages.  Of course it could be that Delia and MWJ are asking for full repayment (rather than re-negotiation) as a condition of sale....

[/quote]

I agree with you,Mr Carrow.The loans have to be addressed but not necessarily repaid.I believe that Peter Cullum addressed this point in the media,and said that he saw no reason why the loans would not be renegotiable.

[/quote]

Wahey! [Y] [:D]

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Mr. Carrow, how about this for an analogy?

Say, (a few years ago!) I was thinking about selling my rather dilapidated tenanted house. It''s been valued at about £36k & you have a £20k mortgage on it.. Along comes a nice man & says "I want to spend £20k on your house to bring it into tip-top condition!" The tenants are all jumping for joy at this & so are you, until you ask him what conditions are attached; he says "well, the tenants can stay, but you & your husband will have to move out""So we get nothing then? What about the mortgage?"Silence.You then feel a mite upset & point out to him that, if he wants you out AND make the promised improvements, he''ll have to find a total of £56k.More silence.To be continued ........

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Delia and MWJ''s shares are currently valued on paper at around £10m. That is based on a share price of £30 each which is more than was originally paid for them. Delia has always said that she knows that the money she puts into the club is effectively dead money and she does not expect to get it all back. She says that she is in it for the love of the club and success for NCFC is all she wants. She has even said she would give her shares away for free if some billionaire came along wanting to plough millions into the club!

On that basis I think that a fair sale price for their shares would be around £6m. I know that Delia paid £25 for alot of her shares but paid less for some at the beginning too? £6m may even represent a profit on what she paid in total. If her previous statements can be taken as the truth she cannot reasonably expect to sell her shares at £30 each.

If Delia agreed to sell for £6m then Cullum would have to offer to buy the rest of the shares at about £18 each. I suspect that most share holders would not wish to sell their shares at any price. Cullum could even make it public that he would prefer people do not take up the offer as he will then be willing to put more money into playing staff in order to discourage takeup of the offer. I reckon that it would then cost him no more than £0.5m to buy the shares from those who accepted the £18m offer.

The £20m of debt would of course need to be dealt with. I am certain that Cullum could speak to the existing lenders about continuing the loans under the existing terms prior to him taking over. I see little reason why they would not agree to this. Even if they did not agree I am sure that a man of Cullum''s stature could re-finance the loans with other lenders so that he had no more capital outlay in taking over the club.

So on that basis I''d say a fair offer would be £6m for control of the club (i.e. Delia and MWJ''s shares)

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[quote user="ron obvious"]

Mr. Carrow, how about this for an analogy?


Say, (a few years ago!) I was thinking about selling my rather dilapidated tenanted house. It''s been valued at about £36k & you have a £20k mortgage on it.. Along comes a nice man & says "I want to spend £20k on your house to bring it into tip-top condition!"
 The tenants are all jumping for joy at this & so are you, until you ask him what conditions are attached; he says "well, the tenants can stay, but you & your husband will have to move out"

"So we get nothing then? What about the mortgage?"

Silence.

You then feel a mite upset & point out to him that, if he wants you out AND make the promised improvements, he''ll have to find a total of £56k.

More silence.

To be continued ........
[/quote]

Not this stupid analogy again. Firstly the house (or shares) are valued at £16k. The £20k mortgage figure is correct. So the owner is in negative equity by £4k. So an offer to take ownership of the house and mortgage payments is actually a great deal for the current owners!

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[quote user="CaptnCanary"]

[quote user="ron obvious"]Mr. Carrow, how about this for an analogy?

Say, (a few years ago!) I was thinking about selling my rather dilapidated tenanted house. It''s been valued at about £36k & you have a £20k mortgage on it.. Along comes a nice man & says "I want to spend £20k on your house to bring it into tip-top condition!" The tenants are all jumping for joy at this & so are you, until you ask him what conditions are attached; he says "well, the tenants can stay, but you & your husband will have to move out""So we get nothing then? What about the mortgage?"Silence.You then feel a mite upset & point out to him that, if he wants you out AND make the promised improvements, he''ll have to find a total of £56k.More silence.To be continued ........[/quote]

Not this stupid analogy again. Firstly the house (or shares) are valued at £16k. The £20k mortgage figure is correct. So the owner is in negative equity by £4k. So an offer to take ownership of the house and mortgage payments is actually a great deal for the current owners!

[/quote]Who/s valuing the club at £16k? You? Why not £10k? £1k?Would you sell under these conditions?If you like, I''ll come round & make you a ''reasonable offer'' for your house. I bet you don''t accept it.Remember: if you don''t have to sellif you don''t want to sellthen why the Hell should you sell. And I would imagine that''s the position you''re in at the moment. Why any different for the Board?

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