Hi Trust Members
If has been sometime since our last e-mail update on the takeover situation,
this was due to the confidentiality clauses that were inserted in the Manderic
indicative offer document which limits the circulation of information.
However as we now seem to be progressing to the final offer stage, we thought we
should give you our assessment of the current situation.
For ease of reference and the potential of responding to additional questions
from members, below we have allocated a letter to each paragraph.
a) The club have officially announced via a press release yesterday that James
Johnson, one of the LCFC Non-Exec Directors, resigned last Friday at an LCFC
board meeting, as our Observer was present during the meeting we are aware of
some details but cannot expand too much. It would be best summarised that James
Johnson felt uncomfortable with recommending to shareholders that they should
accept the Manderic bid and therefore felt it was best to step down.
b) We believe the board are moving towards the day when they will accept that
they have the best deal they can obtain from Manderic and put it forward to
shareholders, probably with the recommendation that the bid should be accepted.
c) We believed the formal bid document would be circulated to shareholders this
week, however following a further conversation with the club today, we now
understand it is more likely to be circulated w/c 15th Jan. Most delays in the
takeover process have been blamed on the LCFC Board in the media, in reality
both parties have played their part, as is the case with this latest delay.
d) The shareholders at the EGM in November agreed unanimously to proceed with
discussions, however many indicated at the meeting they needed much more
information before they would commit to selling their shares, we still don't
know if the final bid document will provide enough details to satisify the vast
majority of shareholders. We detailed a list of questions directly to Mandaric's
representatives, some of which were answered, prior to the EGM in November.
Those left unanswered we cannot progress directly due to the takeover procedures
which states all contact must be between the negotiating teams of the club and
Mandaric.
e) The indicative offer from Mandaric has changed a number of times since the
initial offer which was circulated prior to the shareholders EGM on Nov 18th. We
can't provide details, other than to say that many of the amendments relate to
the timing of payments.
f) In many takeover situations where phased payments are involved it is fairly
common practice to utilise bank guarantees, so all parties feel comfortable that
a delayed payment offers little risk. A key factor in whether the vast majority
of LCFC shareholders will accept the takeover offer will be how many of them
would be willing to accept phased payments without bank guarantees being offered
by Mandaric, if that is what he proposes in his final offer.
g) The frequent use of a £25m by the Leicester Mercury has been mis-leading.
This figure appears to include taking over the debt of the stadium, circa £17m
according to their latest article. Please ignore the £25m figure, because as an
example another media outlet did the simple calculation of £25m-£17m and then
stated that Dowie (see point k below) would have £8m to spend in the transfer
window, which is equally incorrect. The Trust Board finds it strange that 4
years ago as part of a consortium it was widely reported in the Mercury that the
consortium took over the club for around £6m (no mention of the Teachers stadium
loan), yet 4 years on the stadium loan is now within the Mandaric figures.
h) There has been some confusion about the need for the club to hold an EGM to
approve an offer, given that requires 14 days notice prior to the meeting, with
the further delay resulting. Our understanding is that although an EGM must be
held, if the required % of shareholders are willing to commit in writing to sell
their shares to Manderic, that this would be enable the club to indicate to
Mandaric the takeover will be approved and then funds would be released for
squad purposes prior to an EGM being held.
i) Without being able to go into details at this stage, working with the club we
have sought to find a way for the Trust to retain it's shareholding in the club
without having any impact on the takeover deal. This looks likely to happen, but
we will explain how this situation arose at a later date. If this proves to be
the situation, the Trust board will not call a members meeting, however should
we be eventually approached to sell our shares, then subject to time
constraints, the Trust Board plans to call a members meeting, so please check
you e-mails regularly, as an e-mail notification would be the quickest method to
call a short notice meeting.
j) Although as explained earlier we currently cannot have direct dialogue with
the Mandaric team, prior to November 18th, his representative did confirm to the
Trust, that the Trust would be offered a position on the Advisory Board which
would be set up, assuming the takeover is approved. The club have since
confirmed they also believe we would hold a position on this board. We don't at
this stage know the full make up of this board.
k) The position of Rob Kelly has been subject to many rumours, the most
consistent being Iain Dowie being linked with the managers position. The Trust
has received conflicting information from various reliable sources and therefore
is not in a position to clarify on this issue
l) If the Mandaric deal falls through, then the LCFC board will need to put in
place a plan B very quickly to generate additionally funding. Currently the
Board cannot approach other parties due to an exclusivity clause in the Mandaric
indicative bid document, however other options were being looked at prior to the
receipt of the Mandaric indicative bid, so we would anticipate a further flurry
of activity should this be the situation.
m) Finally, the Trust Board cannot predict whether the final offer from Mandaric
will receive enough backing from shareholders or not. We are certainly aware of
shareholders who are totally in favour and a few who expressed serious
reservations at the EGM, however the vast majority at the EGM wanted much more
information and that makes it very difficult to predict.
Hopefully this gives you a feel about the current activity and we will provide
further information as soon as we can. Our plan is to produce a members
newsletter soon after the takeover situation is resolved featuring a diary of
events as the takeover unfolded. We will include as much detail as we are
legally able to do.
Regards
The Foxes Trust Board
in any take over ther will be poeple leaving it happens everytime with every club that is taken over :icon_wink
