davieG Posted 21 February 2007 Share Posted 21 February 2007 MANDARIC TO INJECT £4.5M NEXT MONTH BY ANDY GILGRIST BUSINESS EDITOR 10:30 - 21 February 2007 Milan Mandaric's takeover of Leicester City will see the tycoon put £4.5million into the club next month and another £4.5m before the end of May next year. That £9m cash injection, revealed in a document lodged with the Stock Exchange, will be used to strengthen the squad and provide the money the club needs to function. It also gives Mandaric a controlling share of the club even before the other shareholders sell up. This is because rather than simply buy out the existing shareholders, Mandaric is asking them to agree to issue more than 19 million new shares which he will buy for a shade over 47 pence each. As there were already more than six million shares held in the club, the new shares will give Mandaric more than 75 per cent of the enlarged number of shares in existence. And being above that 75-per-cent mark means Mandaric can control the board, appoint any directors and pass any resolutions he wants to. When the existing shareholders agree to the deal - and more than 94 per cent have given an "irrevocable undertaking" to do so at an Extraordinary General Meeting on March 9 - several things happen, including: * Mandaric puts in £4.5m next month and gets more than 75 per cent of the enlarged number of shares * He gets an option to buy the existing shareholders out, on a sliding scale depending on when he buys and how successful the club has been (see below) * The existing board stands down, save for Malcolm Stewart-Smith, who represents the stadium's financiers, and Tony Lander. Mandaric joins as executive chairman * Chief executive Tim Davies resigns from the board but is kept on as chief executive officer * Each shareholder gets two season tickets, in "mutually acceptable seats" for as long as Mandaric is the majority owner. The sliding scale of payments for the shareholders' shares means they will get at least 10 pence per share (which will cost Mandaric more than £600,000). If City are promoted by the end of the 2009/10 season, the shareholders get another 40 pence per share. If City stay up for a season, they get another 50 pence per share. In effect, if City are promoted and then avoid relegation, the shareholders will get back their original investment. If City are not promoted by the summer of 2010, the original shareholders will get 10p per share. Mandaric could exercise the option to buy at any time before August 15 2010. In theory, he could insist on buying the shares for 10 pence each on March 10 this year. Or he could wait until City are riding high in the table next season, or wait even longer. If he hasn't bought them up by August 2010, the shareholders can force him to do so. Finance expert Mark Faulknall, a principal at accountancy firm Macintyre Hudson, at Meridian Business Park, said: "The deal makes sense. At least he has a demonstrable track record of having done this once before. The way the deal is structured means the old shareholders still have an interest in the club and will share in any success, just as they shared the burden of bringing the club out of administration. It is a question of not forgetting people who have seen the club through difficult times." * The shareholders must be resigned to not seeing a winning streak this season which could lift City into the play-offs. The long and intricately worded legal document does not appear to cover the possibility of promotion this season. Link to comment Share on other sites More sharing options...
Sooper Steve's shin Posted 21 February 2007 Share Posted 21 February 2007 * The shareholders must be resigned to not seeing a winning streak this season which could lift City into the play-offs. The long and intricately worded legal document does not appear to cover the possibility of promotion this season. Is this Milan's sneaky ploy and the reason we're getting loan players in even though we look "safe"? A surge up the table, make the play-offs on the last day, go up and Milan doesn't pay a penny? If you need more evidence, look at some of the decisions that "happened" to go our way on Saturday (I remember one incident where we blatantly headed it out and the linesman gave it to us) and the own goal at Burnley... Link to comment Share on other sites More sharing options...
Monk Posted 21 February 2007 Share Posted 21 February 2007 Just to clarify, to match the average points per game that the current 6th place team has we can only drop 4 points until the end of the season. Not gonna happen is it?? Link to comment Share on other sites More sharing options...
Milky Posted 21 February 2007 Share Posted 21 February 2007 Pete Colly in his Sky report on saturday called it the 25 mill takeover aswell. Silly goons Link to comment Share on other sites More sharing options...
Daggers Posted 21 February 2007 Share Posted 21 February 2007 Already been done here and here Link to comment Share on other sites More sharing options...
davieG Posted 21 February 2007 Author Share Posted 21 February 2007 Already been done here and here In that case some alert mod should close it. Link to comment Share on other sites More sharing options...
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