Investment? £15m nominal value (7 Viewers)

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Pitch87

New Member
Looks like an external investor has invested £15m and now owns 10% of the club.

The calculation is 11,000,000 original shares + 1,222,222 newly issued shares =12,222,222 total shares. 1,222,222 shares therefore equates to 10%.

The £15m looks like it has gone into the company (rather than out to a seller) as these are new shares. This therefore implies Doug valued the club at £135m before the money came in and £150m post money (hence £15m for 10% stake).

It will be very interesting to know who now owns that 10%. Unlikely to be Doug or related party as he could just continue to fund the business by way of the 0% unsecured loans he has used previously.
 
shmmeee

shmmeee

Well-Known Member
Grendel

Grendel

Well-Known Member
Pitch87 said:
Looks like an external investor has invested £15m and now owns 10% of the club.

The calculation is 11,000,000 original shares + 1,222,222 newly issued shares =12,222,222 total shares. 1,222,222 shares therefore equates to 10%.

The £15m looks like it has gone into the company (rather than out to a seller) as these are new shares. This therefore implies Doug valued the club at £135m before the money came in and £150m post money (hence £15m for 10% stake).

It will be very interesting to know who now owns that 10%. Unlikely to be Doug or related party as he could just continue to fund the business by way of the 0% unsecured loans he has used previously.
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It doesn’t imply he values the club at that at all. It’s worth nothing like that.
 
Grendel

Grendel

Well-Known Member
Pitch87 said:
It more than implies, it's a factual calculation.
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It isn’t. It’s an injection of cash through share capital and isn’t to do with any valuation. The club is worth nothing like that.
 
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Pitch87

New Member
fernandopartridge said:
The price to buy a share and the value of the company are not necessarily the same.
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That's the definition of the equity value. We may not agree that it is a rationale valuation by normal metrics but a willing buyer has paid that to a willing seller, hence fair market value. The number of shares multiplied by the price per share is the equity value.
 
Captain Dart

Captain Dart

Well-Known Member
edgy said:
He still owes a % doesn't he? Or did that all get swallowed up when King took over?
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OMG, do you think he's a Klingon.
 
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Deity

Well-Known Member
Pitch87 said:
That's the definition of the equity value. We may not agree that it is a rationale valuation by normal metrics but a willing buyer has paid that to a willing seller, hence fair market value. The number of shares multiplied by the price per share is the equity value.
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These are WUM accounts. They only come on to get a reaction. I wouldn’t try using logic or facts to persuade them.
 
DazzleTommyDazzle

DazzleTommyDazzle

Well-Known Member
Pitch87 said:
That's the definition of the equity value. We may not agree that it is a rationale valuation by normal metrics but a willing buyer has paid that to a willing seller, hence fair market value. The number of shares multiplied by the price per share is the equity value.
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Broadly agree, except that a minority share will be at a discount because of the lack of control.

So, (usually) the value of a 100% stake will be more than 10 times the value of a 10% stake.
 
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oldfiver

Well-Known Member
Pitch87 said:
Looks like an external investor has invested £15m and now owns 10% of the club.

The calculation is 11,000,000 original shares + 1,222,222 newly issued shares =12,222,222 total shares. 1,222,222 shares therefore equates to 10%.

The £15m looks like it has gone into the company (rather than out to a seller) as these are new shares. This therefore implies Doug valued the club at £135m before the money came in and £150m post money (hence £15m for 10% stake).

It will be very interesting to know who now owns that 10%. Unlikely to be Doug or related party as he could just continue to fund the business by way of the 0% unsecured loans he has used previously.
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Why do you suggest a new investor ?

If you check the CCFC Companies House page you will see a similar issue which is where the funds finish up
 
SHUNT31

SHUNT31

Well-Known Member
DazzleTommyDazzle said:
Broadly agree, except that a minority share will be at a discount because of the lack of control.

So, (usually) the value of a 100% stake will be more than 10 times the value of a 10% stake.
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The shares issued are ‘A’ class shares. They are a separate share class which will most likely have different voting rights, entitlement to dividends etc.

It’s unlikely 1 ordinary share will be valued the same as 1 ‘A’ share as they will hold different rights.
 
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Pitch87

New Member
oldfiver said:
Why do you suggest a new investor ?

If you check the CCFC Companies House page you will see a similar issue which is where the funds finish up
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Yes could be Doug, fully agree but why issue new shares when the previous new money (£30m+) that Doug has invested post acquisition has come from interest free loans? If you own 100% you don't need to issue new shares (unless for specific reasons like tax which isn't my area) as dilution isn't an issue. Also think the shareholder rights of the new issuance are filed at Companies House and seem the same as existing shares. Absolutely no reason for thinking this but can't help wondering if Ashley/Arena is involved as greater alignment of interests makes sense but that is complete speculation.
 
SHUNT31

SHUNT31

Well-Known Member
Pitch87 said:
Yes could be Doug, fully agree but why issue new shares when the previous new money (£30m+) that Doug has invested post acquisition has come from interest free loans? If you own 100% you don't need to issue new shares (unless for specific reasons like tax which isn't my area) as dilution isn't an issue. Also think the shareholder rights of the new issuance are filed at Companies House and seem the same as existing shares. Absolutely no reason for thinking this but can't help wondering if Ashley/Arena is involved as greater alignment of interests makes sense but that is complete speculation.
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I agree with this.

It’s not just a share issue, but a whole new class of shares too.

Loaning money would have been much easier, and cheaper (if interest free).
 
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oldfiver

Well-Known Member
Pitch87 said:
Yes could be Doug, fully agree but why issue new shares when the previous new money (£30m+) that Doug has invested post acquisition has come from interest free loans? If you own 100% you don't need to issue new shares (unless for specific reasons like tax which isn't my area) as dilution isn't an issue. Also think the shareholder rights of the new issuance are filed at Companies House and seem the same as existing shares. Absolutely no reason for thinking this but can't help wondering if Ashley/Arena is involved as greater alignment of interests makes sense but that is complete speculation.
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I would think he is constrained by EFL rules regarding debt in CCFC. So he has to put funds in by way of capital
 
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