Just When You Thought The Week Couldn’t Get Worse!
Feb 28th, 2008 by 'holic
A pretty lousy week hasn’t been helped by the news that Alisher Usmanov has set his sights on a blocking stake at Arsenal. The lockdown agreement has effectively put paid to any greater ambitions in the short term.
The veto itself should not be any more than an inconvenience for the existing board. After all, the major decisions concerning the clubs future and a solid financial base for running the stadium, the property arm, and the football side of the business are very much in place already.
However, with that blocking stake the board would have to offer him representation, and that is when the fun may begin. You don’t need to be an Ashburton insider to know that David Dein would be about as welcome as a particularly unpleasant bout of flatulence in a space suit.
Usmanov is possibly many things, but has paid way over the going rate to procure his shareholding. It has to be open to question whether he would risk the value of that investment by putting in place a delegate in whom the rest of the directors could not confide.
Indeed if the Uzbek has any ambition to claim a majority stake at some stage in the future he knows full well he needs to keep relations with the existing leadership of the club reasonably cordial.
The coming weeks will tell us all we need to know about how hostile the predator is. I’m sure I am not alone in hoping that the existing board will also take whatever steps are necessary to absolutely secure future control in the longer term.
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7 Responses to “Just When You Thought The Week Couldn’t Get Worse!”
First Drink?
Just when i thought your posts won’t get any earlier…
I like the shot, is that a comet/shooting star i see or is it a booger on my screen?
Good article. However there is one serious factual error. The board will not have to give Usmanov representation.
He cannot insist on a place on the board until he has a majority of the shares i.e. 50% +1
Phil, Edelman was asked about that recently and said they would have to consider it if he requested a seat on the board, so maybe it’s not such a factual error on ‘holic’s part.
Thanks Phil, you are ‘factually’ correct and my wording perhaps should have been ‘with that blocking stake the board would feel obligated to offer him representation’.
The fact that he satisfies the requirement to have the veto means it would be impractical for them not to get him, or rather his representative, on the inside.
There is no obligation to give him representation on the board; neither is it impractical not to.
The ‘blocking stake’ is not as important as it sounds. There have only been two occassions since PHW became chairman where a block would have come into play as it only refers to major changes to the clubs articles. He could (with the stake) stop the club moving (bit late for that) or issuing more shares but neither is going to happen so in reality all it gives him in reality is the ability to stop someone else buying the club.
Yes, of course they would have to consider it, he would be the biggest single shareholder, so under normal circumstances, it would be the considered thing to do, but they are not obligated to offer it.
The reason they would consider it is that I assume they would rather see if there is a way to resolve this, or at least control it without it reverting to pistols at 50 paces.
Aggravation isn’t really going to help, so if there is a way to resolve this, it wold be better to do so if possible.
I suspect that considering it would also revolve around whether dein was the body put up for the position.
If that was indeed the case, the board might well not offer the seat, but who knows?
The other possibility is that Usmanov might not want a seat on the board just yet anyway.
Under the circumstances, he would probably want to play his cards close to his chest, and putting a representative on the board might not suit his agenda at this stage either.
There are still many twists and turns ahead in this game, I just hope the club isn’t damaged by it.
I have a lot of faith in the current board, they’ve done a stering job, I would not like to see all the hard work destroyed by other’s ambitions.
Usmanov gaining 25% or more changes nothing really in terms of control of AFC but it is a more valuable stake than 24% simply because it does come with certain rights unavailable below that level.
That might make the stake more valuable to someone else intent on taking control of the club. Usmanov claimed a few months back that he saw value in the shares and that he intended to build up a 25% stake and then sit and wait for them to go up. To realise the value he would then presumably sell.
There is little doubt that the ownership of AFC will change hands one day but it probably wont be in the immediate future and it probably won’t be Usmanov who ultimately controls it.