Trust Examine Main Issues of a Bid

In this article we look at some important issues raised by Trust members in respect of the bid by Milan Mandaric for the takeover of Leicester City FC. 

Ownership of the Walkers Stadium – For the club to move forwards re-structuring the debt on the Walkers Stadium is paramount. While the club continues to be in the Championship repayments to Teachers simply serve to pay interest on what is in effect a mortgage. Only a sustained period of Premiership income would reduce the debt & eventually bring ownership of the stadium back to the club. 

Initial media reports on Mandaric’s bid indicated the bid included the purchase of the Walkers Stadium as part of the purchase price for the club. This led some supporters to believe ownership of the stadium would come back to the club & the debt on it would be cleared. 

However it now appears the value of the bid does not include for the purchase of the stadium. That does not mean necessarily Mandaric would not provide finances buy the stadium – but this will have to be repaid in the form of loan or other such agreement. The debt will still exist & until such time as it is repaid ownership of the stadium will not belong to LCFC.

In that respect nothing changes, however if the terms of any loan to purchase the stadium are more favourable than the current deal with Teachers, then clearly this beneficial to the club & would presumably be welcomed by shareholders & fans alike….

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Trust Seeking Answers

Since news broke of the bid by Milan Mandaric for ownership of Leicester City the Trust has raised questions about the bid & his plans for the club. This has been viewed by some fans as being against Mr Mandaric & his bid. The Trust has also been accused of speaking on behalf of all City fans.  

Below Trust Board Member Matt Davis answers these points on behalf of the Trust…. 

To take the 2nd of these points first the Trust does not, never has or would even begin to suggest that we represent all City fans. However with almost 1000 supporters who are members the Foxes Trust IS the largest single fans organisation at the club. 

The Trust also owns 151,000 shares in Leicester City FC. The shares were purchased mostly with the money raised to help save the club from bankruptcy in 2002/3. Some of this money was put in by fans who are either are no longer members or who never chose to join the Trust, but who still put money into a bucket to help save our club.  

When a bid for ownership of the club is received it is the above shares, purchased with the supporters money, which the potential new owner is seeking to acquire – along with shares held by other members of the Lineker Consortium & investors who have since put money into the club. 

The Trust does not hold shares in the club for financial gain – but to ensure compliance with corporate governance legislation & principles through access to audited yearly accounts. As a shareholder the Trust can raise questions about the yearly accounts at the company AGM. 

So clearly when a bid is received for its shares the Trust Board is duty bound to ensure the person/s seeking to acquire them has the best interest of the club & its supporters to the fore….

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Trust Press Release

Foxes Trust Press Release 13/11/06

Following the news the bid for Leicester City Football Club by Milan Mandaric is to be put before shareholders prior to the match with Preston on Saturday the Foxes Trust are urgently seeking reassurances from Mr Mandaric on a number of key issues. The Foxes Trust welcomes the recent comments by Mr Mandaric that he recognises the important role the clubs' supporters have in the success of the football club.  

Foxes Trust Ian Bason commented "When the club came out of administration back in 2003 former Chairman Jon Holmes acknowledged the role played by supporters in saving the club & the importance of supporter representation at the highest level within the club. As a result the Trust holds an Observer role at all club Board meetings."  

Bason continued "Should Mr Mandaric's bid be successful the Trust urge him to, at the very least, continue to uphold this important commitment to the supporters of Leicester City. It is vital for the supporters at any club to have confidence in people running their football club. In recent months the Trust has held discussions with club Chairman Andrew Taylor with a view to facilitating a full Director position on the Board of Leicester City Football Club. We sincerely hope that similar discussions can be held with any new owners of the club at the earliest opportunity….

 

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Takeover Bid – Trust Update (2)

Prior to the Plymouth game, the Foxes Trust Board held an informal meeting for members which provided the opportunity for members to give their personal viewpoint on the current situation and question Trust board members about the latest position. The Trust board would like to thank members who came along or sent apologies and their viewpoint via e-mail. 

While many members primarily attended the meeting to gain information, a number of members expressed their reservations about the Mandaric bid, with particular reference made to his track record at other clubs where minimal cash investment took place. Other members expressed their disappointment with the coverage by the Leicester Mercury in particular the frequent reference to a £25m bid which led some members attending to believe it was a cash amount being offered. 

The Trust can confirm it will be attending the LCFC shareholders meeting on the morning of the Preston game, however the exact format of the meeting is yet to be finalised. The Trust board will meet later this week once the content of the shareholder meeting becomes clear. 

Picking up on questions being raised on message boards, a poster asked whether it was possible that Mandaric could own the club before the Preston game kicks off. This isn’t the case, as a due diligence process would commence if the shareholders agreed to a takeover, and this process normally takes around a month before completion. 

Over the last couple of days fans have started to look at other aspects of the potential takeover wondering what will happen to season tickets and match day prices should the Mandaric bid be successful. The Trust is involved in a Fans Consultative Committee Sub-Group focusing on this ticket prices for next season, with the early indications that match day prices could fall, while season tickets may be on sale much earlier, however all this could be completely reviewed if the takeover goes ahead.

Academy Under 18’s Excellent Season So Far

Matt Davis brings us the latest news from Belvoir Drive: 

Prior to today’s 1-1 draw against Spurs, Leicester City under 18’s had made it nine wins out of eleven with an emphatic 4-0 win against Wimbledon (sadly now officially known as MK Dons) last Saturday (4th November 2006).  Leicester City were 1-0 up at the break with a goal from England under 17 international Ashley Chambers. The second half saw Leicester City take full control with goals for Billy McKay, Joe Mattock (who is another England under 17 international) and Scott Lycett.  The win also achieved without influential midfielder Andy King who was away on International duty with Wales.  

Leicester City were five points clear of the pack in the Group B table after taking an incredible 28 points out of a maximum possible of 33 this season, (this lead was reduced to 3 points today) the highlight of which surely has to be the 4-1 triumph over last seasons champions Aston Villa.  Three players that have particularly caught the eye with their goal scoring attributes are Billy McKay and Max Gradel with 9 goals each, and Eric Odhiambo who has scored ten goals this season.  Eric of course made his first team debut recently in the Carling Cup match against Aston Villa.  

Copyright rules do not permit us to publish full details of forthcoming under 18’s fixtures, but the next home game at Belvoir Drive is against Bristol City on 18 November with a kick off time of 12:00 pm (leaving enough time to get to the first team match against Preston straight afterwards!).  A full list of fixtures can be found on the Leicester City web site. 

I’m sure Jon Rudkin and his team consisting of Steve Beaglehole, Trevor Peake & several part time coaches would love to see you there supporting our players of the future.   

Coming soon – an exclusive Foxes Trust in depth interview with Jon Rudkin.