Mike Ashley Takes Next Step in Newcastle Take-Over Attempt


Mike Ashley continues behind the scenes activities to acquire Newcastle United PLC – and while there have been stories that he already has acquired as much as 54% of the shares – we don’t think that’s true because by law this (50% and 75% acquisitions) has to be announced formally.

The Ashley offer to all remaining stockholders will be sent out before the end of the week.

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Mike Ashley

We know that Sit John Hall sold 41.6% of Newcastle to Ashley and we also know that Freddy Shepherd owns 29.8% of the club so that leaves 28.6% owned by other shareholders – and the vast majority of these are individual shareholders. We would expect most of the small shareholders to accept the bid – if the enthusiasm that offer has received from Newcastle fans is anything to go by.

So we expect starting next week to see just what percentage Ashley can acquire without Shepherd.

His offer of 100p per share – made on May 23rd – is dependent on Ashley acquiring at least 50 % of the shares but the Newcastle Board also has yet to come out with a recommendation to stock-holders.

St. James Park Holdings Limited – the company that was formed to front Ashley’s bid, has 28 days to inform shareholders of the details, and then 60 days during which to consider their response. These are the Stock Exchange rules.

We did report this week on a potential counter-bid from Freddy Shepherd and Scot Sir John Hunter – and even a Far East consortium we understand may be interested.
We hope either these bids are not made – or they are made quickly – so we can get end the uncertainty surrounding the club’s future. Of course the major villain in any delay could be our Chairman Freddy Shepherd – because if he announces he will sell to Ashley – or the Board recommends Ashley’s offer to share-holders – it’s all over and the uncertainty will be ended.

That’s the outcome we would like to see – that Freddy Shepherd – for once in his life – does something that’s of benefit to somebody else – in this case the thousands of Newcastle fans who have been paying his wages for 10 years.

Comments always welcome.



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13 comments so far

  • joe

    Jun 5, 2007 at 10:06 AM

    Comment #1

    The press had reported that he had ‘verbally agreed’ with some shareholders which would take him to the 54% figure. When he has officially reached 50% plus 1 share then an announcement will be made but the press seem to think that he has secured more shares verbally with some of the larger shareholders. Here’s hoping……..

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  • chris

    Jun 5, 2007 at 10:21 AM

    Comment #2

    Shepherd has one more chance to appease the Toon fans. Sell now and all is forgiven. For him to try and buy the rest of the shares with his crones will be devastating to the club. The club probably would never recover, all because of his obsession with the club. Does he really want to do that to his beloved club?

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  • Nick Clark

    Jun 5, 2007 at 11:56 AM

    Comment #3

    The problem is lads, there is no beloved club for FS. He loves being a big fish in a small pond. I believe he will not go easily……

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  • Andy T

    Jun 5, 2007 at 11:57 AM

    Comment #4

    Joe,

    This area is very regulated. If someone promises to sell him their shares in any way other than the formal offer, then they have to publish that intent. The 50% figure that Ashley has to report passing includes both aquired and promised shares. If a party then cannot fullfill their promise for whatever reason then they must also notify this. The intent may not necesarily be published publicly, but must at least be provided to the takeovers panel who monitor the legality of dealings on all takeovers of PLC’s.

    If he has secured promises of 54% then it must be publicly announced before 8am tommorrow.

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  • Ed Harrison

    Jun 5, 2007 at 1:27 PM

    Comment #5

    joe – that’s a good point

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  • Ed Harrison

    Jun 5, 2007 at 1:28 PM

    Comment #6

    Andy T – thanks for clarification on the legal side.

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  • Arthur Prince

    Jun 5, 2007 at 4:06 PM

    Comment #7

    If Mike Ashley does acquire 54%shareholding thenhe has the majority ,so can remove the curent Chairman by his majority voting thus giving him control of the board .So unless he wants to get 75 5 of the share holding needed to take the club out of PLC hands and back into private ownership doesn’t it still mean that he is able to bankroll BSA and develop the club etc .
    Can someone confirm this or am I missing something ?

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  • carl

    Jun 5, 2007 at 4:17 PM

    Comment #8

    ashley could bankroll newcastle now if he liked.its just shepherd would have control of that cash.until freddys gone from either newcastle or his position ashley cant spend his cash how he wants

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  • Ed Harrison

    Jun 5, 2007 at 4:37 PM

    Comment #9

    Arthur – think that’s right – once he gets over 50% he can sack Shepherd as Chairman – have been stories going around. But he needs over 75% for ultimate control. Think Ashley (and most businessmen taking over a club) would want 75% before he’s comfortable. Andy T is our expert on this.

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  • Greg B

    Jun 5, 2007 at 4:58 PM

    Comment #10

    Lets just hope Ken Bates dosent come in with a late bid………………

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  • Andy T

    Jun 5, 2007 at 8:16 PM

    Comment #11

    Arthur,

    If he gets to 54% then he will be able to call the shots on the day to day running of the club. However there are a number of issues, including apointment and removal of directors where more than half the voting shares are needed – this is called a qualified majority. He would not have enough to do this at 54%. He would be in a position where he aould have to get Freddy to agree with him to get certain things through the board, regardless of Freddy being the chairman or not. This would be the worst situation for Newcastle as a fotball club, as both parties would need to be in agreement on anything for it to go ahead really. In that position Mike Ashley isn’t going to be nterested in financing Newcastle. WOuld you put 100M into a club if you knew that to get your 100M back you would have to make 150M and give 50M to Freddy Shepherd for nothing?

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  • Mick Gray

    Jun 6, 2007 at 6:35 AM

    Comment #12

    Doesn’t he need the 75% in order to be able to change the articles of association etc and take the club into private ownership? I suspect he would want to do that so that any sizeable investment was not exposed to the risk (and strict rules) associated with Shareholders and the stock exchange?

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  • Ed Harrison

    Jun 6, 2007 at 8:41 AM

    Comment #13

    Mick – i think that’s exactly right.

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