THE TIMES THEY ARE A CHANGING



The article in The Times today tells us that the sale of the club to Kyril Louis Dreyfus is getting closer day by day.


Martin Hardy’s article tells us that KLD will buy 59% of the club in a deal valuing the club at £30m. That would imply he is paying approximately £18m for his shares and that 41% of the club is owned by someone else. On the basis that, previously, Sartori owned 20%, Methven 6% and Donald 74%, it would seem logical that the sale is direct from Donald to KLD and it takes Donald to 15%.


The article also reports that the ‘American loan’ is cleared as part of the takeover. This is excellent news as it would remove the rights held over the academy and the stadium by anyone other than the new owners. In one way or another, the club has not been in that position since before the building of the stadium and academy, and that financial freedom should not be ignored, it’s a huge step forward. Let’s hope we are never in a position again where the bricks and mortar of the club are used as security. I suspect many will disagree with me, but I’d rather stay in League One than risk the long term future of the club by overreaching financially.


Anyway, assuming these figures are right, it gives us a new starting point. A line in the sand. What the club was worth when it was acquired three years ago, what happened to parachute payments, what got written off or lent or borrowed becomes history. The club has been valued as it stands today and, by all accounts, detailed due diligence completed has concluded that it’s worth £30m. Paperwork which will need to be submitted to companies’ house as part of the takeover will confirm the above (or not) and give us clarity and hopefully help us relax a little.


Interestingly, as we approach the takeover, the valuation is also, basically, irrelevant. Like whether I have paid £120,000 or £150,000 for a house I plan to live in. The house doesn’t change as a result of the cheque that is written. There will be some who choose to spend their time discussing whether it was a fair price and be bitter that the former owner of the house got an extra £30,000 but their bitterness will achieve absolutely nothing at this point. KLD and his advisers have decided it’s a good deal and he’s the one writing the cheque.


Of course, if all the new owner has is the £150,000 and he needs to do the house up, that would be a different matter. Will he have to borrow? Will he simply avoid spending the money to do the refurbishing? Well, with KLD rumoured to be worth in excess of £2b and his apparent contribution to date being only £18m, I don’t think we need to worry about his running out of money or needing to borrow to get us through the next few months. Should we be worrying about the ownership percentage? No. I’ve heard people saying it’s not a takeover if he hasn’t bought 100%. The simple answer to this is if you own more than 50% you control the company. KLD will own 59% so, even if the other three shareholders decided to vote against him, they’d lose.


With Neil Fox’s resignation as a director and the footballing side already ‘under new management’ the evidence suggests the club is well on the way to completing the transition to the Louis Dreyfus era but I’d still like to see the appointment of a business manager to work alongside KLD.


The appointment of Kristjan Speakman gave clear evidence that the football side has been considered and a plan was in place. It’s reassuring to hear Speakman speak (sorry couldn’t resist) about the football aspects of the club including those future plans and not other, less knowledgeable contributors. But what about the non-football side of the club? What plans are there for the business behind the football? The club needs a Speakman equivalent on the business side who will be given the chance to do their job without unreasonable interference from stakeholders. Without that, I worry the club will continue to lack the structure needed to move it forwards in all areas.


One question I have about the takeover, (it isn’t one for KLD on day one, it’s more the accountant in me being curious) is to do with what pre-emption rights exist for KLD to buy the remaining shares at some point in the future. You’d expect there to be something in the agreement that commits to that, perhaps a pre-agreed date or event, perhaps a more general clause that the original Madrox shareholders can’t sell to anyone other than KLD. As I say, it doesn’t really make any difference in terms of the running of the club, I’m just curious. Does KLD have eyes on being the sole owner as he leads us to Champions League glory… OK, I’m getting carried away, but it’d be interesting to see where he sees us (and himself) in say, five or ten years.


The article in the Times adds little to what was already known, the club looks likely to change hands in the very near future, we move away from the Donald era and, hopefully, the repeated conversations that hung over the club during that time. New owner, new beginning and hopefully we can get back to talking about football.