Finance specialUpdated: August 8th, 2007
I’ll start with the two most important questions: how much have we got to spend and how much do we need?
According to The Times, Thaksin had deposited £150m into “escrow accounts” in the name of Seymour Pierce, to prove that he had the ability to finance the takeover. How much of that will be spent on the squad over time is probably something only Thaksin knows.
The consensus is a £50m transfer kitty, while The Guardian believes it’s £30m. Though as the paper claims we are going to offer £12m for Yakubu, something doesn’t quite add up in their story.
The only real indication we have is Thaksin’s own words from June 22, quoted in The Independent:
“If we come across good players, then we will invest in those players. If it is necessary, then £50m will be £50m, £30m will be £30m, it can be done. We need two strikers, two midfielders and maybe a new goalkeeper,” Thaksin said.
Also unclear is whether those sums refer to transfer fees or include extra wage costs.
Considering that Barton is on a reported £60,000-a-week at Newcastle and West Ham are believed to have offered Craig Bellamy £75,000 a week, it’s unlikely that £30m-£50m would stretch to the 10 players Sven is after if it included wage costs.
Looking at the strength of the current squad, it appears a minimum of three to four defenders, four midfielders and two forwards are needed. To get an idea of how much that might cost, these are the players who have been sold for more than £1m this summer:
~ With agent Jerome Anderson still very much in the City spotlight, here are the players on SEM’s books.
City’s current ownership
Below is an updated list of the shareholders who have now sold to Thaksin, following Friday’s confirmation of the takeover on PLUS Markets:
A clearer picture of the ownership structure is also emerging. Kind of. City is now controlled by UK Sports Investments Ltd (USKIL), which in turn is owned by USKI Holdings. Both companies have the same directors.
Here are the shareholders of USKI Holdings, as listed in The Nation:
Thaksin Shinawatra - 57 ordinary shares of £100 each
Panthongtae Shinawatra - 2,845,100 shares of 10p each
Pinthongta Shinawatra - 2,845,100 shares of 10p each
Pramaisuri Property Co Ltd - 41,667 preference shares of £600 each with very limited voting rights.
The Times reveals that Pramaisuri is registered in Bangkok and is controlled by Thaksin and his “immediate family”, according to documents produced by UKSIL’s financial advisers . On June 20 – after a number of Thaksin’s Thai-based assets had been frozen – the company bought a £25m stake in UKSIL, which is believed to be the money used to buy City’s shares.
~ Rumours are growing that some of the larger shareholders holding stakes of less then 3% are reluctant to sell, prompted by the delay in Thaksin reaching 75% and the news that David Bernstein (who owns 1%) appears reluctant to sell.
If I hear anything more concrete about this I’ll pass it on to you.
Who’s lost what
John Wardle (£8.5m loss) and David Makin (£3.2m)
The pair paid a combined £5m for an initial 19.09% stake as part of the 1996 rights issue. In 1999 loans of £4.8m were converted into shares and in 2001 they paid a reported £1m for the 4.88% stake owned by the De Vere Group (formerly Greenalls), bringing the total cost of buying shares to £10.8m. They’ll receive £6.48m for their 29.95% stake, making a loss of £4.32m.
Loans of £19,195,000 were also made to the club, which attracted interest at 5% per year. At the end of the 2005/06 financial year £23.95m was owed to them in total, which would have grown to around £24.9m shortly before the takeover.
According to The Independent they’ll receive just £17.5m as full repayment on the loans. That £7.4m loss, plus the £4.32m lost on share purchases, makes a combined loss of £11.7m.
Breaking the figures down individually, Wardle was owed £3.3m out of £4.8m in loans that were converted into shares in 2001, meaning he paid £6.3m in total for his 16.1% stake. He also loaned the club another £14.7m, compared to Makin’s £4.5m. If the loss on the loans was shared out proportionately, Wardle would be around £5.7m out of pocket and Makin £1.7m.
In all, I calculate Wardle has lost roughly £8.5 and Makin £3.2m, which is not the first time Makin has come out ahead of Wardle. Makin made £53.85m from the sale of JD Sports shares, compared to Wardle’s £48.25m - despite the two starting out with exactly the same stake (details).
BSkyB (£3.36m+)
The broadcaster paid £5.5m for 5,343,622 shares in November 1999 and sold them for £2.14m.
As part of the rights issue, BSkyB also paid another £2.5m for “management of the club’s media and commercial rights” and promised extra payments of up to £3.5m “dependent on on-field performance”.
Boler family (£1.5m)
Stephen Boler paid £5m for 6,250,000 shares in the 1996 rights issue, which increased to 8,750,000 after a bonus share issue was triggered.
After Boler died of a heart attack in October 1998, his stake passed to his family represented by his son, director Mark Boler. Those 8,750,000 shares will fetch £3.5m.
Stephen Boler had previously owned a 30% shareholding from the late 1980s. It’s not known how much he paid for it, though he sold a 10.8% stake to Lee in 1994 for £1.5m and around 10% to Lee’s consortium for an unknown price.
Francis Lee (£1.46m)
Lee paid Peter Swales and Stephen Boler £3m for a 21.6% holding in February 1994, but successive rights issues diluted his stake to 7.13%. He’ll receive £1,542,818 for his 3,857,044 shares.
~ Other financial losers include the two people who bought shares in 1988, shortly after David Bernstein became chairman.
In March 1998, 850,000 shares were issued at 88p each at a cost of £748,000 to “a long-standing supporter”, while in September that year 227,272 shares were issued at 88p each at a cost of £199,999 to another “long-standing supporter”. At the 40p offer price that would represent a loss of £408,000 and £109,090 respectively.
No way to treat a legend
It was probably no great surprise that Dennis Tueart was dumped from the City board considering he represented the 13.85% stake sold by David Makin. But news that he was sacked by email was pretty shocking.
Tueart believes the move might be part of a vendetta against him, telling the Express:
“I’ve thought long and hard about it, and I keep thinking there could have been an outside influence involved with his own agenda – someone with a personal vendetta against me, which has been suggested to me.”
It’s possible he’s just being a touch paranoid. Mark Hodkinson, in his excellent book Blue Moon, describes the difficulties he had dealing with Tueart:
His fussiness about having his photograph taken was comical; he was convinced we were laying a trap for him. He was supposedly the club’s expert on PR, yet his opening gambit was a major PR faux pas. He was immediately confrontational and his ramblings about a possible set-up bordered on the neurotic.
That said, recent history suggests that someone might have been out to get him. In April 2003 - a month after the resignations of David Bernstein and managing director Chris Bird - Tueart was cleared in a club probe into allegations concerning the hiring out of VIP boxes at Maine Road.
Tueart certainly had the ability to rub people up the wrong way. Hodkinson also describes him snapping at fans during a supporters’ club meeting as well as his unfortunate habit of referring to himself in the third person.
But regardless of all of this, you just don’t treat a former player as legendary as Dennis Tueart with such lack of respect.
My main memory of Tueart is, oddly enough, from a reserve game at Maine Road. I don’t remember who our opponents were, or what the score was, or even the year (it was 1980ish). But I do remember Tueart returning from injury and being struck that not only was he the best player on the pitch, he was the best by a long, long mile. His quickness of feet and the cleverness of his touches made the other players just look like dummies.
Tueart, who is a close friend of Kevin Keegan, also deserves praise for bringing Keegan to Maine Road. Okay, it might not have worked out, but those were some exciting years he gave us.
But most of all he was the man whose wonder-goal won us our last major trophy.
Chief executive Alistair Mackintosh, who sacked Stuart Pearce in a brief phone call in May and whose “very cold” behaviour upset Tueart, is very keen to talk up his achievements since his promotion from finance director in 2003.
“We’ve moved the club forward under John’s stewardship, particularly over the last four years as a Premiership club,” he told the MEN.
The reality is that without this takeover City were a financial basket case heading straight to the Championship.
Tucked away on page 63 of the offer documents was the news that the club borrowed a further £10m from Standard Bank last December. That loan was due to be repaid on 8th August - two days after the arrival of £13.5m in TV money. It was a clear case of robbing Peter to pay Paul and showed how the club had run out of options other than to flog academy players as soon as they made an impact.
Alistair Mackintosh has some way to go to show he is the right man to run this club, and now has a boss who will prove far more demanding than Wardle, Makin and Boler.
Let’s hope he is shown more courtesy than Pearce and Tueart should Dr Shinawatra ever decide he is unhappy with the progress being made.