comment by HRH King Ledley (U20095)
posted 2 days, 5 hours ago
This should help you.
Lewis' stake in Spurs is ultimately 60.4%
For him to subsidise Spurs he would have to subsidise the other 39.6% of shareholders
http://m.tottenhamhotspur.com/the-club/investor-relations/shareholder-faqs/
Ultimate ownership of the Club
Of the total issued share capital of Tottenham Hotspur Limited, ENIC International Limited own 85.55%.
Mr D. Levy and certain members of his family are potential beneficiaries of a discretionary trust which ultimately owns 29.4% of the share capital of ENIC International Limited.
Mr J Lewis has an interest of 70.6% of ENIC International Limited.
---------------
I take your point (even though Mr C is busy ignoring it) and sympathise with your logic. The thing is the ownership itself isn't 100% relevant. By this I mean that Mr Lewis can require (via a shareholders' resolution) that Spurs' holding company issues new shares.
Unless disapplied, pre-emption rights apply to those shares - meaning they have to be offered to existing investors pro rata to their current ownership (i.e. if the HoldCo issues 1000 shares, Lewis would be entitled to subscribe for (buy) 604 of them).
As this would be a new issue of shares, that money would go directly to Spurs. Any investors who did not choose to "follow their rights" (i.e. subscribe for shares in proportion to their holding) would then see their allocation of shares be offered more broadly.
Lewis could then take the opportunity to acquire those shares, increasing his hold on the HoldCo.
In short: JL wouldn't have to subsidise other investors in order to put more money into Spurs - he could force (due to the size of his holding) a fresh issue of shares and existing investors would be required to either put in more money themselves or dilute their holdings.
Apologies if this comes across as condescending, but I think a worked example where we imagine Spurs shareholders divide into (i) Joe Lewis; (ii) other investors who want to put money in; and (iii) other investors who don't want to put money in would be helpful.
Today's ownership of Spurs:
(i) JL: c60%
(ii) Investors who want to put money in: c.20%
(iii) Investors who don't want to put money in: c.20%
Spurs declares an issue of 100% new shares (i.e. it doubles its share capital). These shares are offered to the investors in proportion with their holdings above.
(i) Joe Lewis subscribes for the shares offered to him, meaning his stake remains at c.60% (but it is c.60% of a company with more cash in it, so no "loss" to him in balance sheet terms)
(ii) supportive investors subscribe (maintaining at c.20% of the larger company)
(iii) unsupportive investors decline to offer, meaning that they only hold c.20% of the original company (i.e. 10% of the company now that it has doubled its size).
This leaves 10% of the enlarged company that is then re-offered to Joe Lewis and the supportive investors (again, pro rata to their ownership), resulting in shareholdings as follows:
(i) JL: c67.5% (his original c.60% and his share of the additional 10% re-offered (i.e. 60% of 80% outstanding shares = 3/4))
(ii) Investors who want to put money in: c.22.5% (their original c.20% and their share of the additional 10% re-offered)
(iii) Investors who don't want to put money in: c.10%
This process can be repeated at intervals or can be done in larger scale - e.g. in my example above I've suggested a 1:1 issue (i.e. to double the share capital of the company). If JL wanted to move faster, he could do a 1:4 (i.e. quadruple the co's share capital).
The fact that he hasn't done this to date suggests he is happy with the status quo.
Would welcome further discussion on this if anything's unclear (I have obviously simplified the process, but it's really not tricky to do). Don't think I've posted on here for 2 or more years!
Basically the mechanic provides for shareholders to either put more cash into the business or lose their shareholding. If you think about this logically, the reason it's allowed under company law in the UK (and in the rest of the world in fact) is to ensure that a company's growth is not prevented by someone who is unwilling to invest further. They do not lose their money (as noted above - the unwilling investors' share dropped from 20% of a company sized at 100 to 10% of a company sized at 200 - so no loss).
In an extreme case, a strong shareholder (or group of shareholders) can dilute the unwilling investors down to 5% (at which point they can effect a number of other mechanics to compulsorily acquire the unwilling investors' shares if they are desperate to acquire 100% control).
It would be ENIC doing this, not Joe Lewis himself, I assume. ENIC own 85.55% of the club.
Lewis does not own ENIC outright, so I would assume he would have to first use this mechanism to take total control of ENIC. Lewis owns 70.6% of ENIC currently.
It is by the by really - ENIC are an investment company. He is ultimately there to make money, not throw it away.
We are an asset, not a toy
comment by Inactive User (U9750)
posted 19 hours, 55 minutes ago
comment by HRH King Ledley (U20095)
posted 2 days, 5 hours ago
This should help you.
Lewis' stake in Spurs is ultimately 60.4%
For him to subsidise Spurs he would have to subsidise the other 39.6% of shareholders
http://m.tottenhamhotspur.com/the-club/investor-relations/shareholder-faqs/
Ultimate ownership of the Club
Of the total issued share capital of Tottenham Hotspur Limited, ENIC International Limited own 85.55%.
Mr D. Levy and certain members of his family are potential beneficiaries of a discretionary trust which ultimately owns 29.4% of the share capital of ENIC International Limited.
Mr J Lewis has an interest of 70.6% of ENIC International Limited.
---------------
I take your point (even though Mr C is busy ignoring it) and sympathise with your logic. The thing is the ownership itself isn't 100% relevant. By this I mean that Mr Lewis can require (via a shareholders' resolution) that Spurs' holding company issues new shares.
Unless disapplied, pre-emption rights apply to those shares - meaning they have to be offered to existing investors pro rata to their current ownership (i.e. if the HoldCo issues 1000 shares, Lewis would be entitled to subscribe for (buy) 604 of them).
As this would be a new issue of shares, that money would go directly to Spurs. Any investors who did not choose to "follow their rights" (i.e. subscribe for shares in proportion to their holding) would then see their allocation of shares be offered more broadly.
Lewis could then take the opportunity to acquire those shares, increasing his hold on the HoldCo.
In short: JL wouldn't have to subsidise other investors in order to put more money into Spurs - he could force (due to the size of his holding) a fresh issue of shares and existing investors would be required to either put in more money themselves or dilute their holdings.
Apologies if this comes across as condescending, but I think a worked example where we imagine Spurs shareholders divide into (i) Joe Lewis; (ii) other investors who want to put money in; and (iii) other investors who don't want to put money in would be helpful.
Today's ownership of Spurs:
(i) JL: c60%
(ii) Investors who want to put money in: c.20%
(iii) Investors who don't want to put money in: c.20%
Spurs declares an issue of 100% new shares (i.e. it doubles its share capital). These shares are offered to the investors in proportion with their holdings above.
(i) Joe Lewis subscribes for the shares offered to him, meaning his stake remains at c.60% (but it is c.60% of a company with more cash in it, so no "loss" to him in balance sheet terms)
(ii) supportive investors subscribe (maintaining at c.20% of the larger company)
(iii) unsupportive investors decline to offer, meaning that they only hold c.20% of the original company (i.e. 10% of the company now that it has doubled its size).
This leaves 10% of the enlarged company that is then re-offered to Joe Lewis and the supportive investors (again, pro rata to their ownership), resulting in shareholdings as follows:
(i) JL: c67.5% (his original c.60% and his share of the additional 10% re-offered (i.e. 60% of 80% outstanding shares = 3/4))
(ii) Investors who want to put money in: c.22.5% (their original c.20% and their share of the additional 10% re-offered)
(iii) Investors who don't want to put money in: c.10%
This process can be repeated at intervals or can be done in larger scale - e.g. in my example above I've suggested a 1:1 issue (i.e. to double the share capital of the company). If JL wanted to move faster, he could do a 1:4 (i.e. quadruple the co's share capital).
The fact that he hasn't done this to date suggests he is happy with the status quo.
Would welcome further discussion on this if anything's unclear (I have obviously simplified the process, but it's really not tricky to do). Don't think I've posted on here for 2 or more years!
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Carra: Spurs Will Become Like Leeds
Page 5 of 5
posted on 17/2/17
comment by HRH King Ledley (U20095)
posted 2 days, 5 hours ago
This should help you.
Lewis' stake in Spurs is ultimately 60.4%
For him to subsidise Spurs he would have to subsidise the other 39.6% of shareholders
http://m.tottenhamhotspur.com/the-club/investor-relations/shareholder-faqs/
Ultimate ownership of the Club
Of the total issued share capital of Tottenham Hotspur Limited, ENIC International Limited own 85.55%.
Mr D. Levy and certain members of his family are potential beneficiaries of a discretionary trust which ultimately owns 29.4% of the share capital of ENIC International Limited.
Mr J Lewis has an interest of 70.6% of ENIC International Limited.
---------------
I take your point (even though Mr C is busy ignoring it) and sympathise with your logic. The thing is the ownership itself isn't 100% relevant. By this I mean that Mr Lewis can require (via a shareholders' resolution) that Spurs' holding company issues new shares.
Unless disapplied, pre-emption rights apply to those shares - meaning they have to be offered to existing investors pro rata to their current ownership (i.e. if the HoldCo issues 1000 shares, Lewis would be entitled to subscribe for (buy) 604 of them).
As this would be a new issue of shares, that money would go directly to Spurs. Any investors who did not choose to "follow their rights" (i.e. subscribe for shares in proportion to their holding) would then see their allocation of shares be offered more broadly.
Lewis could then take the opportunity to acquire those shares, increasing his hold on the HoldCo.
In short: JL wouldn't have to subsidise other investors in order to put more money into Spurs - he could force (due to the size of his holding) a fresh issue of shares and existing investors would be required to either put in more money themselves or dilute their holdings.
Apologies if this comes across as condescending, but I think a worked example where we imagine Spurs shareholders divide into (i) Joe Lewis; (ii) other investors who want to put money in; and (iii) other investors who don't want to put money in would be helpful.
Today's ownership of Spurs:
(i) JL: c60%
(ii) Investors who want to put money in: c.20%
(iii) Investors who don't want to put money in: c.20%
Spurs declares an issue of 100% new shares (i.e. it doubles its share capital). These shares are offered to the investors in proportion with their holdings above.
(i) Joe Lewis subscribes for the shares offered to him, meaning his stake remains at c.60% (but it is c.60% of a company with more cash in it, so no "loss" to him in balance sheet terms)
(ii) supportive investors subscribe (maintaining at c.20% of the larger company)
(iii) unsupportive investors decline to offer, meaning that they only hold c.20% of the original company (i.e. 10% of the company now that it has doubled its size).
This leaves 10% of the enlarged company that is then re-offered to Joe Lewis and the supportive investors (again, pro rata to their ownership), resulting in shareholdings as follows:
(i) JL: c67.5% (his original c.60% and his share of the additional 10% re-offered (i.e. 60% of 80% outstanding shares = 3/4))
(ii) Investors who want to put money in: c.22.5% (their original c.20% and their share of the additional 10% re-offered)
(iii) Investors who don't want to put money in: c.10%
This process can be repeated at intervals or can be done in larger scale - e.g. in my example above I've suggested a 1:1 issue (i.e. to double the share capital of the company). If JL wanted to move faster, he could do a 1:4 (i.e. quadruple the co's share capital).
The fact that he hasn't done this to date suggests he is happy with the status quo.
Would welcome further discussion on this if anything's unclear (I have obviously simplified the process, but it's really not tricky to do). Don't think I've posted on here for 2 or more years!
posted on 17/2/17
Basically the mechanic provides for shareholders to either put more cash into the business or lose their shareholding. If you think about this logically, the reason it's allowed under company law in the UK (and in the rest of the world in fact) is to ensure that a company's growth is not prevented by someone who is unwilling to invest further. They do not lose their money (as noted above - the unwilling investors' share dropped from 20% of a company sized at 100 to 10% of a company sized at 200 - so no loss).
In an extreme case, a strong shareholder (or group of shareholders) can dilute the unwilling investors down to 5% (at which point they can effect a number of other mechanics to compulsorily acquire the unwilling investors' shares if they are desperate to acquire 100% control).
posted on 18/2/17
It would be ENIC doing this, not Joe Lewis himself, I assume. ENIC own 85.55% of the club.
Lewis does not own ENIC outright, so I would assume he would have to first use this mechanism to take total control of ENIC. Lewis owns 70.6% of ENIC currently.
It is by the by really - ENIC are an investment company. He is ultimately there to make money, not throw it away.
We are an asset, not a toy
posted on 18/2/17
comment by Inactive User (U9750)
posted 19 hours, 55 minutes ago
comment by HRH King Ledley (U20095)
posted 2 days, 5 hours ago
This should help you.
Lewis' stake in Spurs is ultimately 60.4%
For him to subsidise Spurs he would have to subsidise the other 39.6% of shareholders
http://m.tottenhamhotspur.com/the-club/investor-relations/shareholder-faqs/
Ultimate ownership of the Club
Of the total issued share capital of Tottenham Hotspur Limited, ENIC International Limited own 85.55%.
Mr D. Levy and certain members of his family are potential beneficiaries of a discretionary trust which ultimately owns 29.4% of the share capital of ENIC International Limited.
Mr J Lewis has an interest of 70.6% of ENIC International Limited.
---------------
I take your point (even though Mr C is busy ignoring it) and sympathise with your logic. The thing is the ownership itself isn't 100% relevant. By this I mean that Mr Lewis can require (via a shareholders' resolution) that Spurs' holding company issues new shares.
Unless disapplied, pre-emption rights apply to those shares - meaning they have to be offered to existing investors pro rata to their current ownership (i.e. if the HoldCo issues 1000 shares, Lewis would be entitled to subscribe for (buy) 604 of them).
As this would be a new issue of shares, that money would go directly to Spurs. Any investors who did not choose to "follow their rights" (i.e. subscribe for shares in proportion to their holding) would then see their allocation of shares be offered more broadly.
Lewis could then take the opportunity to acquire those shares, increasing his hold on the HoldCo.
In short: JL wouldn't have to subsidise other investors in order to put more money into Spurs - he could force (due to the size of his holding) a fresh issue of shares and existing investors would be required to either put in more money themselves or dilute their holdings.
Apologies if this comes across as condescending, but I think a worked example where we imagine Spurs shareholders divide into (i) Joe Lewis; (ii) other investors who want to put money in; and (iii) other investors who don't want to put money in would be helpful.
Today's ownership of Spurs:
(i) JL: c60%
(ii) Investors who want to put money in: c.20%
(iii) Investors who don't want to put money in: c.20%
Spurs declares an issue of 100% new shares (i.e. it doubles its share capital). These shares are offered to the investors in proportion with their holdings above.
(i) Joe Lewis subscribes for the shares offered to him, meaning his stake remains at c.60% (but it is c.60% of a company with more cash in it, so no "loss" to him in balance sheet terms)
(ii) supportive investors subscribe (maintaining at c.20% of the larger company)
(iii) unsupportive investors decline to offer, meaning that they only hold c.20% of the original company (i.e. 10% of the company now that it has doubled its size).
This leaves 10% of the enlarged company that is then re-offered to Joe Lewis and the supportive investors (again, pro rata to their ownership), resulting in shareholdings as follows:
(i) JL: c67.5% (his original c.60% and his share of the additional 10% re-offered (i.e. 60% of 80% outstanding shares = 3/4))
(ii) Investors who want to put money in: c.22.5% (their original c.20% and their share of the additional 10% re-offered)
(iii) Investors who don't want to put money in: c.10%
This process can be repeated at intervals or can be done in larger scale - e.g. in my example above I've suggested a 1:1 issue (i.e. to double the share capital of the company). If JL wanted to move faster, he could do a 1:4 (i.e. quadruple the co's share capital).
The fact that he hasn't done this to date suggests he is happy with the status quo.
Would welcome further discussion on this if anything's unclear (I have obviously simplified the process, but it's really not tricky to do). Don't think I've posted on here for 2 or more years!
----------------------------------------------------------------------
So what are you trying to say
Page 5 of 5