New Investment Options

[steelboy]

1 minute ago, Villageman said:

My experience of Treasurer for a registered charitable organisation with HMRC for the best part of 20 years would confirm that it is unlawful NOT to include loans and grants as income in any given year and repayments too. 

It's well explained in the new club statement. 

[StAndrew7]

tl;dr:

"We know what's best, you're too stupid to understand it all and that's it."

Read it in Jim McMahon's voice. Then it makes perfect sense.

[Villageman]

52 minutes ago, StAndrew7 said:

Investment update #2

This might take a while to digest...

Agreed.  However points immediately sticks out for me, very possibly my misunderstanding.

300,000 shares issued, WS have 71% equals 213000. 87000 shares held privately. Did not realise share issue was so huge.

Second point is that public meeting is not being considered. I have never seen the MFC constitution but there must be a clause in there that allows members ie shareholders , usually a minimum of 3, to request an extraordinary meeting which cannot be refused.

Can any shareholder confirm this and be prepared to consider this action.

I have not read the rules of the WS lately but surely the same arrangement applies there too.

[steelboy]

Just now, Villageman said:

 

Second point is that public meeting is not being considered. I have never seen the MFC constitution but there must be a clause in there that allows members ie shareholders , usually a minimum of 3, to request an extraordinary meeting which cannot be refused.

 

They obviously don't want information about the deal to circulate. 

If one person asks a question by email one person hears the answer. If one person asks at a meeting the answer is available to everyone present and anyone who reads a report. 

It's also worth remembering that the club can't indulge in their usual bullshit like 'oh we just forgot to announce the contract' as they are under legal obligations as part of the takeover process. 

[weeyin]

"Under the investment proposal in year 6, Erik Barmack would own 49% of the club’s shares."

"This, however, very importantly would not make him the majority shareholder in the club."

As far as I can see, while technically true, it is for all intents and purposes true that 49% would let him win every single shareholder vote. All it takes is for 1.1% of the remaining shareholders to not vote - which is pretty much guaranteed in any shareholders voting situation.

 

[dennyc]

1 hour ago, steelboy said:

 

To avoid any new investor becoming the majority shareholder the only way this can be achieved is for the club to issue new shares (at the exact same price) to be purchased by the Well Society and the current 29% other shareholders if they so wish, who have the legal right to be involved in any new share issue.

This is to preserve fan ownership.

 

 

The Club Board are taking it for granted that existing Ordinary Shareholders can afford to purchase new Shares or actually want to. To match Barmack and preserve a majority.

The Well Society do have funds available to purchase new shares, but in time those funds will dry up. Especially if subscriptions drop off as a result of this investment offer. And they will. 

Unlike the other 29%,  the WS are being forced to buy the shares to retain a majority. Using up funds. What choice will they have? End result, empty coffers for the Society.

And what about the other 29% of Shareholders? Who knows for sure that they will take up their new shares. So the Society can buy them as well. More funds gone forever, if there are actually any available

I see this whole thing as a not so subtle way for the Club Board to access whatever funds the Society has left, having previously been allowed to help themselves to a substantial sum outwith terms that were originally agreed. Monies gone forever as 'donated' rather than 'loaned'.  Recent changes to the WS Board have attempted to address that practice and so protect fans' donations. That has not gone down well.

Not for me, and in my opinion anyone who signs up to this can forget all about fan ownership. Eventually that status will just become part of our history.

[dennyc]

2 minutes ago, weeyin said:

"Under the investment proposal in year 6, Erik Barmack would own 49% of the club’s shares."

"This, however, very importantly would not make him the majority shareholder in the club."

As far as I can see, while technically true, it is for all intents and purposes true that 49% would let him win every single shareholder vote. All it takes is for 1.1% of the remaining shareholders to not vote - which is pretty much guaranteed in any shareholders voting situation.

 

What is to stop McMahon, Dickie, and others from taking up the new shares, as will be their right. And then selling them to Barmack? Is there anything to stop Barmack hoovering up shares increasing his holding to a majority. Maybe I'm missing something here.

[Spiderpig]

7 minutes ago, dennyc said:

What is to stop McMahon, Dickie, and others from taking up the new shares, as will be their right. And then selling them to Barmack? Is there anything to stop Barmack hoovering up shares increasing his holding to a majority. Maybe I'm missing something here.

That is exactly what will happen until he has 51% and complete control, and at that point the concept of fan ownership will cease and the millions contributed by WS members will have been for nothing. That's the time I fear for the clubs future as it's not guaranteed under Barmack or this offer.

[santheman]

Unless there was a condition that stated the WS MUST retain a minimum of 51% of the shareholding now and in the future regardless of any future jiggerypokery in regards to share issues then its bye bye to fan ownership.

All the talk about accounting practices and valuation of the club is a side issue for me and clouds the main point.

[steelboy]

24 minutes ago, dennyc said:

What is to stop McMahon, Dickie, and others from taking up the new shares, as will be their right. And then selling them to Barmack? Is there anything to stop Barmack hoovering up shares increasing his holding to a majority. Maybe I'm missing something here.

Exactly.

Also the way the deal is structured is complicated but it requires a large increase in the number of shares issued each year. This means that anyone who buys in year 1, 2 and 3 will get fewer shares than someone who just buys in year 6 despite spending three times as much money (it could be worse than that)

The deal seems to be structured so the Well Society runs out of cash when the share issue is largest. The club haven't bothered their arse to tell us what happens with those shares in year 5 and 6 if the Well Society can't buy them. Can Jim McMahon and Douglas Dickie buy them? Can Erik Barmack buy them? 

 

[weeyin]

30 minutes ago, dennyc said:

What is to stop McMahon, Dickie, and others from taking up the new shares, as will be their right. And then selling them to Barmack? Is there anything to stop Barmack hoovering up shares increasing his holding to a majority. Maybe I'm missing something here.

Absolutely. I was just pointing out that even in the best case scenario, EB will essentially have a majority without the need to purchase any more shares - and all this "not the majority shareholder" is meaningless.

[steelboy]

Quote

By ensuring the Well Society plus the other club supporters, who as previously noted are also mostly society members (and presumably when the Well Society sold them part of its shares it did so on the assumption it could still rely on their support in future years) had a block vote of 51% it is considered by the club Board that fan ownership has been retained.

The fact that they are trying to pass this off as fan ownership is an insult to our intelligence. 

This is an easy win for the Society board to point out how dishonest the club are being.

[steelboy]

 

Quote

The investment proposal requires the Well Society to invest further sums to the club and as equity rather than an increase in its loan.

This is the part of it that pisses me off the most.

Why does the proposal require the Well Society to invest further sums to lose it's majority control and see it's shareholding reduce from 71% to 46%? 

Why did the Well Society representatives on the Executive Board agree to this? Not one person is willing to stand up in public or even just put out a statement and justify this part of the deal. Dickie and Downey resigned as soon as it was finalised and Feeley is in hiding. That tells you everything you need to know about the proposal: its indefensible.

Even McMahon in his latest spiel doesn't provide a single reason why the deal should be structured this way. It's just presented as completely natural and neutral when in reality it goes against any basic understanding of fairness.

[weeyin]

It's like they took the structure of Les Hutchison's takeover deal and negotiated the exact opposite.

[steelboy]

Quote

 

There has also been discussion about asset stripping in future years.

Given the nature of our assets and the safeguards built into the transaction its is very very difficult to see any way that could happen. It is also very rare for an investment to be made in a private company where no value can move in the first six years of that investment.

 

A fairly transparent attempt to make it sound like the safeguards last longer than six years.

After six years we have zero protection but McMahon doesn't seem to care. Maybe he knows something we don't.

[weeyin]

6 minutes ago, steelboy said:

A fairly transparent attempt to make it sound like the safeguards last longer than six years.

After six years we have zero protection but McMahon doesn't seem to care. Maybe he knows something we don't.

Also "its is very very difficult to see any way that could happen" is just another way of saying "it's possible that it could happen"

[steelboy]

9 minutes ago, weeyin said:

Also "its is very very difficult to see any way that could happen" is just another way of saying "it's possible that it could happen"

It's a double very so it must be true.

I think McMahon's outlook is summed up by the fact that he is placing all the scrutiny on the club and the Society and basically zero on Barmack. All the focus is on the Society and club's finances but Barmack's finances are apparently to be taken on trust. There's nothing about how much his plans for AI marketing and global branding will cost in terms of initial outlay or what kind of contracts he intends to enter into. There is nothing today about what Barmack is actually bringing other than a pittance of cash which he then controls.

As I understand it the primary responsibility of a chairman is to protect shareholder value. We somehow have a chairman who is proposing to annihilate shareholder value in favour of an unimpressive outside investor. And he somehow has no shame about it.

[Kmcalpin]

Have I missed something or did Erik Barmack not suggest that he might tweak his proposal? 

[bobbybingo]

It's always very, very difficult to see something when you close your eyes.

[steelboy]

Derek confirming on Twitter what I pointed out at the weekend. The shareholding can go much lower than 46%. 

"To be clear, the Society’s shareholding could drop into the mid-30% range even if we invest £1.85m into MFC.

The Society business plan will be ready to share with members very soon."

https://x.com/derekwatson89/status/1803458482953203748?t=-a4KRzaIubB24BXBqQRvZg&s=19

 

[Kmcalpin]

On odd statement by the club. It didn't say anything new or reference any amended proposal, but rather explained a few aspects in more detail. I do accept though some of the financial "facts", such as the effect of freezing season ticket prices. There's always a danger with these matters that we throw the baby out with the bathwater. 

What strikes me though is the continuing disconnect between the 2 boards. In the reference to EB numbers surely it's up to the Society board to exert its will? 

Some very good work and excellent posts on P & B but I'm concerned by some posters' attitude towards those who support the Barmack's proposal. Everyone is entitled to their view  which I might not agree with, but we shouldn't ridicule them. 

[Clackscat]

2 hours ago, Kmcalpin said:

On odd statement by the club. It didn't say anything new or reference any amended proposal, but rather explained a few aspects in more detail. I do accept though some of the financial "facts", such as the effect of freezing season ticket prices. There's always a danger with these matters that we throw the baby out with the bathwater. 

What strikes me though is the continuing disconnect between the 2 boards. In the reference to EB numbers surely it's up to the Society board to exert its will? 

Some very good work and excellent posts on P & B but I'm concerned by some posters' attitude towards those who support the Barmack's proposal. Everyone is entitled to their view  which I might not agree with, but we shouldn't ridicule them. 

I thought the statement was nothing more than a smokescreen, there is no need to get worked up about valuations, of more concern is potential shareholdings and there is plenty to be concerned about there.

EB has gone silent on his  tweaked offer, and no longer posting on p&b.

The club post on fb did produce a number of positive comments, however I wonder how many will have a vote as I doubt they are WS members.

The WS really need to step up to plate now, with a detailed rebutal, but how we have got ourselves into a situation where the Board of the largest shareholder in the club are not leading the negotiations,but a chairman leaving the club is, well thats beyond me

 

 

 

[cambo97]

9 hours ago, weeyin said:

"Under the investment proposal in year 6, Erik Barmack would own 49% of the club’s shares."

"This, however, very importantly would not make him the majority shareholder in the club."

As far as I can see, while technically true, it is for all intents and purposes true that 49% would let him win every single shareholder vote. All it takes is for 1.1% of the remaining shareholders to not vote - which is pretty much guaranteed in any shareholders voting situation.

 

Putting on my "weeyin" pedantry hat, it's actually 2.1% (really 1 share higher than 2%).   

[weeyin]

10 minutes ago, cambo97 said:

Putting on my "weeyin" pedantry hat, it's actually 2.1% (really 1 share higher than 2%).   

Well if you want to be doubly pedantic, you're assuming all the remaining shareholders are going to vote against him - but I take your point on the sums.

[David]

13 hours ago, Clackscat said:

EB has gone silent on his  tweaked offer, and no longer posting on p&b.

More than likely because the executive board at the club, showing incredible levels of delusion, have told him that he won't need to change anything or cede any ground, because they'll "deal with" the fans. All he has to do is make sure he has the money and his Tequila pal ready, and has the front office at Wembley on speed dial.