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There has been a lot going on over the past few weeks with regard to our clubs shareholdings and in particular the movements of Stan Kroneke. I have written the following reply on another website and thought I should share it here as well. Putting my Corporate Financiers hat on once more for the season.....there are a number of reasons that Stan may have taken his holding up to the current level and not all mean that he is poised for a take-over.
1.) He is planning to make an offer to all parties and is not yet in the position to do so. By acquiring up to the maximum allowable he has time to prepare. It is worth noting that once he holds 29.99% (30% let's say) he not only has to make an offer to all shareholders but will have to do so everytime he trys to acquire more shares in the future, which is very expensive in legal costs etc....He will also be barred from any other share movements for 6 months after each purchase. 2.) This is a fixed investment that he expects to see a good profit from. Because he believes in the club, he has acquired as much as legally possible without making a formal offer for everything. It is possible a club owned 100% by Stan would be worth less, so he if he is after capital appreciation, his investment will probably stop here. 3.) He is in colusion with the Arsenal board to act as a safety valve against Red & White Holdings (Usmanov). By holding the maximum amount of shares, he would be able to rapidly launch a takeover bid in order to block one from Usmanov. The reason for taking this measure is probably down to the fact that the board recognise that they have no control over Lady Nina Bracewell's shareholding, which if acquired by Red & White, would enable them to launch a takeover bid. By holding this large amount, Stan (and the board) could block the Uzbeki at the slightest hint of Lady Nina selling up. My personal belief is that explanaition 3 is closer to the truth than any other. Stan's last 9 purchases have all been at £8,500 per share, which probably means this was a fixed offer worked out at a board meeting. Another question that is often asked is about Stan's silence on the matter. It is well documented that if he made any inclination he would be banned from making a bid for 6 months under the city takeover rules. ...but if he isn't going to make a take-over bid, why stay silent as the 6 month ban wouldn't matter?? The answer again points to number 3. He and the board do not want to lose their ability to block Usmanov. If they did get banned, they would be powerless to block any move from Red & White Holdings for 6 months. This is one of the realities about floating on a public market. However, the plus market is not the FTSE100 and one of it's biggest critisms is the lack of liquidity in share movement....ie: a tiny amount of shares are traded by the public, the rest are held by individuals and families that would never sell.....as such it is almost impossible to gain a share price. If I'm correct and option 3 is close to the truth, then I think we have to accept that the board are doing all that they can to ensure they retain some control of the club or atleast retain control in who buys the club....they are ensuring Usmanov can't sweep in and gain a significant holding from under their feet....because even if the board held their shares, Usmanov could buy Lady Nina's shares, make a formal offer and get enough acceptance to gain 51%.....or control. This can't be allowed to happen. Hope that is useful. On a final note, I must apologise for my own lack of blogging of late. It's very rewarding to have so many e-mails asking where the blogs have gone and hopefully I have replied to them all. Whilst I plan to re-ignite the weekly postings I would encourage you all to get our very own secretary Fraz blogging in the site again....I've been lucky enough to have Steve Cameron as a fellow blogger on the site and nothing motivates my writing of a blog more than seeing a colleague make a post. My offerings are somewhat conservative and I can assure you that our Secretaries would contrast this more than adequately! Start the campaign......get Fraz Blogging..... And very finally, please give all the support you can to Mike and his fundraising for Yorkhill Childrens Hospital.
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