NEW SHARES

[PurpleCanary 5,633]

Impossible to know whether this is significant, but there is  an interesting-looking resolution on NCFC shares to be voted on at the company''s AGM on January 18.

 

For starters there is a fairly standard resolution renewing the directors'' ability to allot new shares. In this case up to a nominal value of £1m. Until now the authority had been to allot new shares with a nominal value of  a bit under £900,000. It doesn''t specify which kinds of shares. The ones that matter, generally speaking, are the £1 ordinary shares that are currently sold at £30.

 

But that is being followed by a resolution on the "disapplication of pre-emption rights". Doncha just love jargon? Normally, when new shares are issued, existing shareholders get first refusal. This disapplication" resolution would remove that right of first refusal.

 

The implication MIGHT be that these new shares would be aimed at new investors.

[ManchesterCanary 0]

Am I the only one who hardly understands a word of that...

[Graham Paddons Beard 2,489]

[quote user="PurpleCanary"]

Impossible to know whether this is significant, but there is  an interesting-looking resolution on NCFC shares to be voted on at the company''s AGM on January 18.

 

For starters there is a fairly standard resolution renewing the directors'' ability to allot new shares. In this case up to a nominal value of £1m. Until now the authority had been to allot new shares with a nominal value of  a bit under £900,000. It doesn''t specify which kinds of shares. The ones that matter, generally speaking, are the £1 ordinary shares that are currently sold at £30.

 

But that is being followed by a resolution on the "disapplication of pre-emption rights". Doncha just love jargon? Normally, when new shares are issued, existing shareholders get first refusal. This disapplication" resolution would remove that right of first refusal.

 

The implication MIGHT be that these new shares would be aimed at new investors.

[/quote]

 

Interesting Purple. What other reasons could there be for such a move? It does seem slightly unusal? Could you enlighten us futher?

[Badger 2,421]

Purple - the interesting thing is why the (possible) new investors are keen to prevent other existing shareholders from expanding their allocation of shares. I am probably reading far too much into this, but the inference that I am making is pretty obvious.

[PurpleCanary 5,633]

[quote user=" Badger"]Purple - the interesting thing is why the (possible) new investors are keen to prevent other existing shareholders from expanding their allocation of shares. I am probably reading far too much into this, but the inference that I am making is pretty obvious.[/quote]

 

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Badger, afraid it doesn''t look quite so obvious to me. If anything the opposite looks obvious. As far as one can tell this is not a case of possible new investors trying to prevent existing shareholders from expanding their allocation.

If it is anything, and I''m not sure it is anything that significant, it is a case of the existing shareholders (ie those who control the company) giving up the chance to expand their own allocations.

 

My reasoning is simple. It is the majority shareholders whose vote will decide this issue. The possible new investors in your hypothesis simply don''t have the voting power to affect the outcome. I don''t understand how your plan works in practical terms.

 

I should add that if the club did ever sell all these £1m-worth of (nominal) £1 shares that would potentially increase the number of shares in the company from a bit over 500,000 to a bit over 1.5m. At a stroke that would mean a change of ownership, unless Smith and Jones bought a substantial number. And that, as explained above, doesn''t seem to be the idea. But I would caution against reading too much into this, given that the club has said very recently it had failed to find any potential new investors.

[Graham Paddons Beard 2,489]

[quote user="PurpleCanary"]

[quote user=" Badger"]Purple - the interesting thing is why the (possible) new investors are keen to prevent other existing shareholders from expanding their allocation of shares. I am probably reading far too much into this, but the inference that I am making is pretty obvious.[/quote]

 

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Badger, afraid it doesn''t look quite so obvious to me. If anything the opposite looks obvious. As far as one can tell this is not a case of possible new investors trying to prevent existing shareholders from expanding their allocation.

If it is anything, and I''m not sure it is anything that significant, it is a case of the existing shareholders (ie those who control the company) giving up the chance to expand their own allocations.

 

My reasoning is simple. It is the majority shareholders whose vote will decide this issue. The possible new investors in your hypothesis simply don''t have the voting power to affect the outcome. I don''t understand how your plan works in practical terms.

 

I should add that if the club did ever sell all these £1m-worth of (nominal) £1 shares that would potentially increase the number of shares in the company from a bit over 500,000 to a bit over 1.5m. At a stroke that would mean a change of ownership, unless Smith and Jones bought a substantial number. And that, as explained above, doesn''t seem to be the idea. But I would caution against reading too much into this, given that the club has said very recently it had failed to find any potential new investors.

[/quote]

 

But presumably this would be seen as removing a potential obstacle to new investment ie a new investor would be reluctant if the incumbant shareholders could simply expand their holding and effectively diminish the control of sadi new investor? With this now removed it may pave the way? As asked before ,Purple (or anyone esle), what other reasons could there be for this? It does seem odd that the incumbents would (quietly) give up this preference?

  

[PurpleCanary 5,633]

[quote user="Graham Paddons Beard"]

 

 

But presumably this would be seen as removing a potential obstacle to new investment ie a new investor would be reluctant if the incumbant shareholders could simply expand their holding and effectively diminish the control of sadi new investor? With this now removed it may pave the way? As asked before ,Purple (or anyone esle), what other reasons could there be for this? It does seem odd that the incumbents would (quietly) give up this preference?

  

[/quote]

 

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GPB, that IS roughly the way I see it. Removing a potential obstacle to new investment. Although obstacle is probably too strong a word. And I don''t off hand see what other reason there might be. But I still wouldn''t read too much into this. I think this is just a prudent change in case it might facilitate future investment, and I suspect it is symbolic as much as anything, at least for now.

 

I don''t see that in practical terms the status quo (with S&J having first refusal on buying new shares) is a bar to investment at all.

 

[Badger 2,421]

Purple - I accept that I am probably reading too much into this and my judgement is being clouded by optimism. I am not sure, however, why existing share holders would wish to give up the chance to expand their own allocation. What is the danger to them?

[PurpleCanary 5,633]

[quote user=" Badger"]Purple - I accept that I am probably reading too much into this and my judgement is being clouded by optimism. I am not sure, however, why existing share holders would wish to give up the chance to expand their own allocation. What is the danger to them?[/quote]

 

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Badger, two points. Firstly, there is no suggestion these extra shares are going to be put on the market any time soon. At the moment they exist only as a possibility. And any decision on that would be in the hands of Smith and Jones. If they do nothing, then they stay as owners. There is no particular point in them expanding their holding, as far as controlling the club is concerned.

 

Secondly, this move (to give up the chance to buy new shares) only looks surprising if one regards Smith and Jones as determined to hold on to the club at all costs. As being obstacles to a takeover. I never have regarded them that way, mainly because of a total lack of any hard evidence.

 

[Badger 2,421]

Thanks Purple.

I am still not really clear on why they should make this move, however.

[YankeeCanary 0]

[quote user=" Badger"]Thanks Purple. I am still not really clear on why they should make this move, however.[/quote]

"It''s Christmas" said Tiny Tim.

[PurpleCanary 5,633]

[quote user="YankeeCanary"]

[quote user=" Badger"]Thanks Purple. I am still not really clear on why they should make this move, however.[/quote]

"It''s Christmas" said Tiny Tim.

[/quote]

 

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Well it is a New Year RESOLUTION![:D][;)][:D]

I''ll get my coat...

 

[Bill 1,788]

I''m not too sure what the ''investor'' bit is.

Unless the club is paying a dividend then any purchase of shares is one of donation - not investing.

The only way anyone would see purchasing shares as an investment would be to take control of the club. that would mean buying Smith and Jones shares rather than any new allocation. Then they could ''invest'', as the shyster is doing down the A140.

The pre-emption clause merely protects existing share holders by allowing them the chance to buy any new shares first to stop their holding being watered down. It is not an intent by existing shareholders, merely an option that they can exercise if they see fit. So it is not them blocking anything, simply a part of the clubs constitution.

Perhaps nearer the time we will be told what lies behind this

[PurpleCanary 5,633]

[quote user="City1st"]

The only way anyone would see purchasing shares as an investment would be to take control of the club.

 

That would mean buying Smith and Jones shares rather than any new allocation.

 

[/quote]

 

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Those two statements purport to be certainties, but of course they are not. Quite possibly probabilities, but not certainly not certainties.

 

It is possible that someone would want to buy a substantial minority holding.

 

It is also possible someone would want to take control by buying new shares rather than Smith and Jones''s.

 

This move by the board would facilitate both those possibilities. And that may well be the thinking behind it. Simply to facilitate those options IF there either of those eventualities came about. Just a bit of prudent "What if...?" forward-thinking.

 

[William Darby 0]

Could they just be planning for possible outcomes in the future? As in, they are still looking for investors, but  rather than blindly asking for investment,  they are planning  to say.  ''Look we have this number of shares for this amount of money'', and ''this number of shares for this amount of money''.  Bit like new housing plots,  you know what you''ll get for your money before you enter into any serious negotiations.