dongonzalos
Well-Known Member
Apologies if this has already been seen
But when SISU attempted to take over Southampton their idea was to get to the Premiership.
Most have considered this to be the case when they took over us.
Saints v Coventry, who SISU later took over
THIS letter sets out the indicative terms (the “Proposal”) on which SISU Capital Limited, for and on behalf of the SISU Capital Private Equity Funds (hereinafter “SISU”), would be prepared to make an investment in Southampton Leisure Holdings plc (hereinafter “Saints” or the “Club”).
In order to be able to make this Proposal, SISU and their advisors have conducted significant due diligence and, subject to final confirmatory due diligence and the production of the appropriate documentation, believe that it should be possible for an investment to be completed prior to the end of November 2007.
SISU would be a strong and supportive shareholder whose interests will be closely aligned with both the current shareholders and the fans of the Club alike.
SISU is a long-term investor, with resources potentially available in addition to the Proposal, which intends to support the development of the Club.
SISU expects to work closely with the Club’s existing management to develop and implement a strategic plan based on sound management of football related activities and financial disciplines to create long term stability for shareholders, employees, supporters and the community within the Club operates.
Further details are set out below.
SISU has structured its proposed investment so that rather than only acquiring existing shares which would result in no new money being injected into the Club, additional funds will become available via a placing of 30,000,000 new ordinary shares at 40p per share (the “Placing”), raising £12m (gross) for the Club.
The Placing will provide much needed financial support and the stability required to allow the Club to progress and, accordingly, we believe that the proposed investment is in the best interests of the Club and its shareholders as a whole.
Subject to satisfactory irrevocable being received to vote in favour of the Placing (including the Takeover Code Whitewash vote) and SISU having no less than 51.38% of the fully diluted share capital of the Club following the Placing, SISU will also make a tender offer (the “Tender Offer”) to acquire existing ordinary shares at 40p per share, up to a value of £4m (10,000,000 shares).
The Tender Offer will be made to all of the Club’s shareholders and to the extent that it is oversubscribed, tenders to sell sharers will be scaled down to a pro rata basis.
We believe the proposed structure will provide the correct balance of new funding for the Club and address the potential concerns of shareholders who may wish to realise some or all of their investment in the Club.
It is a condition of any investment that SISU will hold, following the Proposal, no less than 55% of the fully diluted share capital of the Club.
We believe that, given the discussions with the Club, its advisors and the due diligence conducted to date, 40 pence per share is an appropriate discount to the current share price which does not reflect the financial condition of the Club.
In order for SISU to formally announce and enter into the Proposal, SISU will require satisfactory irrevocable undertakings from shareholders representing not less than 14,200,000 existing ordinary shares to vote in favour of the Placing resolutions and with respect to the Tender Offer to tender not less than 2,150,000 ordinary shares to ensure that on a fully diluted basis following the Proposal, SISU will hold not less than 55% of the fully diluted share capital of the Club.
This will allow SISU to create equity incentives for management and employees without being diluted below 50%.
The Proposal is therefore: ● A Placing of 30,000,000 new ordinary shares to SISU at 40p per share; plus ● A Tender Offer for 10,000,000 existing ordinary shares at 40p per share.
The Tender Offer will only be made on receipt of the irrevocable undertakings detailed above.
The above structure will provide £12m of new investment into the Club to be invested in its long-term future and up to £4m for existing shareholders to realise all or part of their holdings.
The Proposal will provide existing shareholders with the ability to crystalise some or all of their investment in the Club whilst guaranteeing a significant level of new investment into the Club.
We believe this will be extremely attractive to shareholders as it provides for significant new capital investment in the Club at a time when the Club’s prospects for attaining Premier League status are not certain.
As previously indicated SISU has invested in both listed and unlisted equity securities.
It is able to take a long-term view in its investments with the funds being made available not having any specifically defined time period for realisation.
With regard to the availability of further funds to strengthen the Club’s first team squad in addition to the significant equity investment which is proposed, SISU, as a new and supportive investor, has further funds available to invest in new players and football related activities.
Such additional investment will be assessed at the appropriate time.
However, SISU’s best hope of maximising its investment is linked to Saints’ prospects for promotion to the Barclays Premier League and as such SISU would expect to make funds available if appropriate.
Should further investment be required it is the current intention that this would be made by way of non-dilutive loan capital.
However, SISU cannot rule out that any such investment might be made by via an equity investment if it was appropriate depending on the prevailing situation at the time of any such investment.
With respect to the Club’s existing debt, it is SISU’s intention to refinance this via internal or third party sources, the composition of which is still to be determined.
We would, as part of our due diligence process, require access to the existing debt providers.
We have received and reviewed the due diligence information provided to us and provided you with an additional information request.
Accordingly, with the exception of limited confirmatory due diligence, the key items of which are detailed below, we would expect to be in a position to announce the Proposal by the end of October 2007 with completion occurring during November 2007.
The final items that we have requested include, inter alia: ● Up-to-date financial information; ● Completion of property searches and satisfactory review of the most recent valuation reports; and ● Employment contracts for all senior management (exec and non-exec contracts) and key footballing management staff.
We note your comments regarding the decision making process of the existing Board and whilst we would hope that the Proposal would be capable of receiving a unanimous recommendation, we may be prepared to proceed with a majority recommendation, subject to SISU and its advisors being satisfied that it is a workable proposal.
In relation to the composition of the Club Board, following the proposed investment SISU will require numerical control.
The proposal is three members of the existing Board are joined by three appointments of SISU, with one of the SISU appointments being the Chairman and having a deciding vote.
The proposal is: Existing Board Members Jim Hone (CEO) David Jones (FD) Ken Dulieu (Non-executive) SISU Appointments Onyechinaedu Igwe (Non-executive) Ray Ranson (Non-executive) Appointment to be agreed (Nonexecutive) Following the completion of the Proposal we would intend to work with the Club to determine the optimal structure of both the plc and football boards to take the Club forward.
In order to maximise SISU’s and existing shareholders’ investment, it is intended that certain key members of the Board and management would be incentivised by way of an equity option scheme, in line with most listed companies, which rewards performance.
It is SISU’s intention that cash bonuses would be available to certain key members of the management team upon achievement of the Club’s promotion to, and remaining in, the Premier League.
It is also anticipated that such members would see a significant increase in salary relative to their current salary levels upon promotion and remaining in the Premier League.
SISU has yet to review senior management contracts and, accordingly, SISU would confirm any increases available upon the situation arising.
This scheme is not necessarily intended to be put in place at the time of the proposed investment and SISU would work with the Club’s Board to structure an appropriate set of targets, both financial and operational, following the investment.
In recognition of the value generated by the senior management team to date in sourcing additional investment for the Club, SISU would propose an additional bonus of up to £300,000 payable to the management team upon completion of the Proposal.
In relation to our request for a cost underwrite/inducement fee, subject to agreement on terms of the Proposal with the board, SISU would require an inducement fee of 1% of the current market capitalisation (approximately £150,000).
This would be payable in the event that, for any reason other than the withdrawal of SISU, the Proposal does not complete.
SISU is keen to move forward and make an investment in Saints, in line with the Proposal.
Accordingly, we would like to reach agreement on these terms as soon as possible.
ONYECHINAEDU IGWE, Managing Director, SISU Capital Limited
But when SISU attempted to take over Southampton their idea was to get to the Premiership.
Most have considered this to be the case when they took over us.
Saints v Coventry, who SISU later took over
THIS letter sets out the indicative terms (the “Proposal”) on which SISU Capital Limited, for and on behalf of the SISU Capital Private Equity Funds (hereinafter “SISU”), would be prepared to make an investment in Southampton Leisure Holdings plc (hereinafter “Saints” or the “Club”).
In order to be able to make this Proposal, SISU and their advisors have conducted significant due diligence and, subject to final confirmatory due diligence and the production of the appropriate documentation, believe that it should be possible for an investment to be completed prior to the end of November 2007.
SISU would be a strong and supportive shareholder whose interests will be closely aligned with both the current shareholders and the fans of the Club alike.
SISU is a long-term investor, with resources potentially available in addition to the Proposal, which intends to support the development of the Club.
SISU expects to work closely with the Club’s existing management to develop and implement a strategic plan based on sound management of football related activities and financial disciplines to create long term stability for shareholders, employees, supporters and the community within the Club operates.
Further details are set out below.
SISU has structured its proposed investment so that rather than only acquiring existing shares which would result in no new money being injected into the Club, additional funds will become available via a placing of 30,000,000 new ordinary shares at 40p per share (the “Placing”), raising £12m (gross) for the Club.
The Placing will provide much needed financial support and the stability required to allow the Club to progress and, accordingly, we believe that the proposed investment is in the best interests of the Club and its shareholders as a whole.
Subject to satisfactory irrevocable being received to vote in favour of the Placing (including the Takeover Code Whitewash vote) and SISU having no less than 51.38% of the fully diluted share capital of the Club following the Placing, SISU will also make a tender offer (the “Tender Offer”) to acquire existing ordinary shares at 40p per share, up to a value of £4m (10,000,000 shares).
The Tender Offer will be made to all of the Club’s shareholders and to the extent that it is oversubscribed, tenders to sell sharers will be scaled down to a pro rata basis.
We believe the proposed structure will provide the correct balance of new funding for the Club and address the potential concerns of shareholders who may wish to realise some or all of their investment in the Club.
It is a condition of any investment that SISU will hold, following the Proposal, no less than 55% of the fully diluted share capital of the Club.
We believe that, given the discussions with the Club, its advisors and the due diligence conducted to date, 40 pence per share is an appropriate discount to the current share price which does not reflect the financial condition of the Club.
In order for SISU to formally announce and enter into the Proposal, SISU will require satisfactory irrevocable undertakings from shareholders representing not less than 14,200,000 existing ordinary shares to vote in favour of the Placing resolutions and with respect to the Tender Offer to tender not less than 2,150,000 ordinary shares to ensure that on a fully diluted basis following the Proposal, SISU will hold not less than 55% of the fully diluted share capital of the Club.
This will allow SISU to create equity incentives for management and employees without being diluted below 50%.
The Proposal is therefore: ● A Placing of 30,000,000 new ordinary shares to SISU at 40p per share; plus ● A Tender Offer for 10,000,000 existing ordinary shares at 40p per share.
The Tender Offer will only be made on receipt of the irrevocable undertakings detailed above.
The above structure will provide £12m of new investment into the Club to be invested in its long-term future and up to £4m for existing shareholders to realise all or part of their holdings.
The Proposal will provide existing shareholders with the ability to crystalise some or all of their investment in the Club whilst guaranteeing a significant level of new investment into the Club.
We believe this will be extremely attractive to shareholders as it provides for significant new capital investment in the Club at a time when the Club’s prospects for attaining Premier League status are not certain.
As previously indicated SISU has invested in both listed and unlisted equity securities.
It is able to take a long-term view in its investments with the funds being made available not having any specifically defined time period for realisation.
With regard to the availability of further funds to strengthen the Club’s first team squad in addition to the significant equity investment which is proposed, SISU, as a new and supportive investor, has further funds available to invest in new players and football related activities.
Such additional investment will be assessed at the appropriate time.
However, SISU’s best hope of maximising its investment is linked to Saints’ prospects for promotion to the Barclays Premier League and as such SISU would expect to make funds available if appropriate.
Should further investment be required it is the current intention that this would be made by way of non-dilutive loan capital.
However, SISU cannot rule out that any such investment might be made by via an equity investment if it was appropriate depending on the prevailing situation at the time of any such investment.
With respect to the Club’s existing debt, it is SISU’s intention to refinance this via internal or third party sources, the composition of which is still to be determined.
We would, as part of our due diligence process, require access to the existing debt providers.
We have received and reviewed the due diligence information provided to us and provided you with an additional information request.
Accordingly, with the exception of limited confirmatory due diligence, the key items of which are detailed below, we would expect to be in a position to announce the Proposal by the end of October 2007 with completion occurring during November 2007.
The final items that we have requested include, inter alia: ● Up-to-date financial information; ● Completion of property searches and satisfactory review of the most recent valuation reports; and ● Employment contracts for all senior management (exec and non-exec contracts) and key footballing management staff.
We note your comments regarding the decision making process of the existing Board and whilst we would hope that the Proposal would be capable of receiving a unanimous recommendation, we may be prepared to proceed with a majority recommendation, subject to SISU and its advisors being satisfied that it is a workable proposal.
In relation to the composition of the Club Board, following the proposed investment SISU will require numerical control.
The proposal is three members of the existing Board are joined by three appointments of SISU, with one of the SISU appointments being the Chairman and having a deciding vote.
The proposal is: Existing Board Members Jim Hone (CEO) David Jones (FD) Ken Dulieu (Non-executive) SISU Appointments Onyechinaedu Igwe (Non-executive) Ray Ranson (Non-executive) Appointment to be agreed (Nonexecutive) Following the completion of the Proposal we would intend to work with the Club to determine the optimal structure of both the plc and football boards to take the Club forward.
In order to maximise SISU’s and existing shareholders’ investment, it is intended that certain key members of the Board and management would be incentivised by way of an equity option scheme, in line with most listed companies, which rewards performance.
It is SISU’s intention that cash bonuses would be available to certain key members of the management team upon achievement of the Club’s promotion to, and remaining in, the Premier League.
It is also anticipated that such members would see a significant increase in salary relative to their current salary levels upon promotion and remaining in the Premier League.
SISU has yet to review senior management contracts and, accordingly, SISU would confirm any increases available upon the situation arising.
This scheme is not necessarily intended to be put in place at the time of the proposed investment and SISU would work with the Club’s Board to structure an appropriate set of targets, both financial and operational, following the investment.
In recognition of the value generated by the senior management team to date in sourcing additional investment for the Club, SISU would propose an additional bonus of up to £300,000 payable to the management team upon completion of the Proposal.
In relation to our request for a cost underwrite/inducement fee, subject to agreement on terms of the Proposal with the board, SISU would require an inducement fee of 1% of the current market capitalisation (approximately £150,000).
This would be payable in the event that, for any reason other than the withdrawal of SISU, the Proposal does not complete.
SISU is keen to move forward and make an investment in Saints, in line with the Proposal.
Accordingly, we would like to reach agreement on these terms as soon as possible.
ONYECHINAEDU IGWE, Managing Director, SISU Capital Limited
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