What Would They Be Buying?

[Boy Genius]

That woud be to presume that the club is still worth what was paid to bring it out of administration - and I am sure that it isn't I would be surprised if the people who invested then think that they will get more than a small percentage of their money back.

believe me they think they will get big premiums back on their outlay if a buyer comes in......... They will not budge if they think they will lose out

 

[bocadillo]

believe me they think they will get big premiums back on their outlay if a buyer comes in......... They will not budge if they think they will lose out

I'm sure that any buyer would put them tight on the subject. And if they don't budge, we all lose out. - even them!

 

[Graz]

I seem to remember the Trust saying that it would cost around £5m to buy the club....

We have decent training facilities, and that would be something that's attractive to any potential buyers I think. We've got a decent stadium, albeit we don't own it, but a buyer would only have to pay to buy back the stadium, not to build a new one and get through the lengthy process that takes.

I'd say we're a fairly decent option for a buyer. We're a big city, with no really big clubs anywhere nearby, so there's a big potential fanbase. We'd be cheap to buy and have good facilities. We probably would be an attractive option, but the debts mean that there are better options around and it would take a while for any investment in us to turn prosperous I think, but when it does, it could be a fairly big gain.

 

[bocadillo]

I seem to remember the Trust saying that it would cost around £5m to buy the club....

And presumably they said that as current shareholders...

 

[Jeff]

I seem to remember the Trust saying that it would cost around £5m to buy the club....

I can't remember anyone saying that.

 

[Dour]

believe me they think they will get big premiums back on their outlay if a buyer comes in......... They will not budge if they think they will lose out

Hard one to call. I reckon that most of the current shareholders thought they were just throwing their money down the pan - that they'd chucked it in out of some sense of duty/charity with no expectation of getting it back. Seeing Mandaric making money from football investment, the Reading spiv hoping to and the dirty money circling West Ham might have made them think that they can get something back. But I can't see that the Leicester shareholders were in it from the start to make money.

 

[Jeff]

The lcfc name and it's brand.
A championship level club and all it's players.
The training ground (worth a good wedge).
A % of the stadium that has already been paid off.

Maybe someone in the know could confirm whether the club does actually own the training ground.

According to the information provided when we were in administration, we owed Barclays £5 million, which was secured on various things, including the training ground and other land / property (valued at around £1.5 million).
The administration document seems to indicate that Barclays would get their £5 million due to the secured nature of the loan, which suggests the training ground and other assets would be sold to pay the debt (or Barclays would take ownership of them) at the time of administration.

So did the club buy it back when we came out of administration, is it owned by Barclays and we pay rent, is it 'mortgaged' and we are still paying for it, or did we never lose ownership?

 

[Foxes_Trust]

I seem to remember the Trust saying that it would cost around £5m to buy the club....

No we didn't say that.

Currently the number of issued shares (£1 each) are just under £6.4m, we would expect shareholders to want to receive their original investment back rather than make a profit.

So if a potential investor wanted to buy the club 100%, then £6.4m would be a starting point, then it depends if they want to own the ground, if so Teachers would probably want around £16-17m, so that's a potential £23.4m before money could be utilised on squad improvements.

However there are further options, maybe an investor wouldn't want to buy all the shares, 51% would give the majority to run the club. That could be achieved by buying half the existing shares..
.. or an additional massive share issue, generating enough shares to give 51% of the total shareholding, which in affect halves the value of existing shares, not sure the current shareholders would agree to that though

 

[Jeff]

.. or an additional massive share issue, generating enough shares to give 51% of the total shareholding, which in affect halves the value of existing shares, not sure the current shareholders would agree to that though

But that wouldn't really halve the value of existing shares.
If an extra £6 million worth of shares was issued and the money raised was invested in the club it would increase the value of the club, so although each existing shareholder would own a smaller percentage of the club, the value of their shareholding could stay the same.

 

[Fox Fan]

But that wouldn't really halve the value of existing shares.
If an extra £6 million worth of shares was issued and the money raised was invested in the club it would increase the value of the club, so although each existing shareholder would own a smaller percentage of the club, the value of their shareholding could stay the same.

But being majority shareholder couldn't he block the issuing of futher shares?

 

[Jeff]

But being majority shareholder couldn't he block the issuing of futher shares?

He could, but that's not relevant to the post you quoted. The extra shares I was talking about would be what gives him/her/it the 51% shareholding, not something that happens after he/she/it has taken control of the club.

 

[bocadillo]

... we would expect shareholders to want to receive their original investment back rather than make a profit.

I would expect that shareholders would be realistic and understanding the fact that under the present set-up the club is likely to die a slow death, they will be ready to accept somewhat less than that - the alternative would be for their shareholding to be worth nothing at all at some time in the future.

 

[SilverFox]

All pie in the sky at the moment because no one is buying us. Although I wish they would!

 

[Jeff]

I would expect that shareholders would be realistic and understanding the fact that under the present set-up the club is likely to die a slow death, they will be ready to accept somewhat less than that - the alternative would be for their shareholding to be worth nothing at all at some time in the future.

If someone like Mandaric is oinly interested in buying a club so he can make a profit from it why should the current shareholders let him have it for less than the real value?
With the money he's made from Portsmouth he should at least be able to afford to fairly compensate the people who put their money in when our club was desperate.

 

[Ox Fox]

If someone like Mandaric is oinly interested in buying a club so he can make a profit from it why should the current shareholders let him have it for less than the real value?
With the money he's made from Portsmouth he should at least be able to afford to fairly compensate the people who put their money in when our club was desperate.

Any idea how much he will have made from Portsmouth Jeff?

 

[bocadillo]

If someone like Mandaric is oinly interested in buying a club so he can make a profit from it why should the current shareholders let him have it for less than the real value?
With the money he's made from Portsmouth he should at least be able to afford to fairly compensate the people who put their money in when our club was desperate.

I'm not sure why you have chosen to personalise this to 'Mandaric'. I was replying to a general question that was asked without regard to personalities. Notwithstanding I think most people would agree that Mandaric's interest in Portsmouth has been far more than profit based - and he has done a tremendous service to the club; I see no reason to begrudge him his wind-fall..

I have already said why I believe that shareholders would be willing to sell for a reduced price and that is to avoid future losses. Neither football nor business is fair - I am sure that any sensible person who puts money into a football club is aware of this.

 

[Hazzman]

To prove football is not a money making game when you have sold two players in 5million plus aswell.

http://news.bbc.co.uk/sport1/hi/football/teams/s/southampton/5398518.stm

 

[Jeff]

I'm not sure why you have chosen to personalise this to 'Mandaric'.

Because the debate started because of his alleged interest, and some people here seem to think it's only a matter of time before he turns up. They also seem to think that a good businessman can come into a club like ours and make a profit.

If someone comes in with the idea of making a profit I don't think the club should be sold on the cheap.

If someone comes in with a genuine interest in the club doing well I don't think there's any reason why the current shareholders should sell, just issue more shares. The money the new person puts in could then go into the squad rather than going to the existing shareholders.

 

[homer]

Because the debate started because of his alleged interest, and some people here seem to think it's only a matter of time before he turns up. They also seem to think that a good businessman can come into a club like ours and make a profit.

If someone comes in with the idea of making a profit I don't think the club should be sold on the cheap.

If someone comes in with a genuine interest in the club doing well I don't think there's any reason why the current shareholders should sell, just issue more shares. The money the new person puts in could then go into the squad rather than going to the existing shareholders.

If someone comes in for any reason then they should be prepared to pay whatever the club is worth at the time. I wouldn't expect the shareholders to give up their interests for a lower amount - whether it is for the good of the club or not.

As for the share issue idea, the last thing that this club needs is yet another finger in the decion making pie. A football club needs clear an unequivocal governance - not some namby pamby co-operative style committee. The current set-up is pitiful

And yes, I accept that this extends the risks associated with the club - but playing it safe (as we currently are) is leading LCFC to a slow and very painful death

 

[Jeff]

As for the share issue idea, the last thing that this club needs is yet another finger in the decion making pie. A football club needs clear an unequivocal governance - not some namby pamby co-operative style committee. The current set-up is pitiful

If the new share issue gives someone more than 50% ownership the decision making will be down to one person.