PLC to Continue to Own 12.5 Per Cent of Town
Thursday, 22nd Apr 2021 14:56
Ipswich Town PLC shareholders will continue to own 12.5 per cent of the club after Gamechanger 20 Ltd opted not to exercise its tag right to purchase those shares.
The PLC represents the shareholding of the club prior to Marcus Evans’s 2007 takeover with the majority of those owning the shares - who number around 3,500 - supporters who bought them as the club sought to raise cash following the 2003 period in administration.
In a letter to shareholders, PLC chairman Roger Finbow wrote: “You will almost certainly be aware that a few days ago Marcus Evans Group (MEG) announced it had sold its 87.5 per cent holding in ITFC to Gamechanger 20 Limited (Gamechanger), a company controlled by a group of US investors.
“When MEG invested in ITFC in December 2007, it was agreed that in the event of control of ITFC passing in the future to a third party, the purchaser would have the right to require Ipswich Town PLC to transfer to it, for the same price per share as paid to MEG, PLC’s 12.5 per cent shareholding (the “drag”); and PLC would have the reciprocal right to require the purchaser to buy the shareholding on the same terms (“the tag”) . This is a right that would be exercisable by PLC only in respect of its entire holding.
“The price paid to MEG was 35p per share. This contrasts with the £20 per share that most shareholders will have paid in 2003 or 2006.
“Gamechanger has indicated that it does not intend to exercise the drag, and indeed is happy to continue to support PLC on the same terms as MEG has done since 2007.
“The board has taken soundings of the top 20 shareholders. Those accounting for over 56 per cent of the share capital of PLC have indicated a preference for maintaining the current position and not for selling to Gamechanger. The board has therefore concluded that we should not exercise our tag right.
“In reaching our decision the board has had regard to the clear preference expressed by our biggest shareholders; to what we believe is the emotional attachment that most shareholders will have to ITFC, represented by their respective shareholdings; to the price per share; to the importance of continuing some small level of community ownership; and to the value we believe most shareholders attach to having an annual opportunity at the AGM to meet with the manager and ITFC’s senior executives.”
But while the PLC will maintain its 12.5 per cent stake in the club in the immediate future, Finbow says that may not always be the case.
“You may recall that when MEG invested, we advised that PLC’s shareholding might be further diluted if MEG were to inject additional sums by way of equity,” he continued.
“In fact, this never happened – Marcus Evans funded ITFC by loans - but you should be made aware that Gamechanger has indicated that it is probable that further cash injections will be made by increasing the share capital of ITFC.
“In those circumstances, PLC’s shareholding will be diluted (except in the unlikely event of PLC being in a financial position to subscribe for further shares on the same basis as Gamechanger).”
Finbow says the PLC is still planning to hold a meeting in August which will be attended by the new ownership.
“Subject to any remaining Covid restrictions it is still intended to hold on Monday 2nd August our belated annual meeting, at which I’m pleased to say Paul Cook, new chairman Mike O’Leary and new chief executive Mark Ashton all hope to be present,” he added.
“This is a new era for ITFC. After the disappointments of the past few years it is a time to get behind the team and show our support for the players, coaching and behind the scenes staff and our new owners as we welcome them to Ipswich Town.”
Photo: Action Images
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