Mandaric Bid “Green Light”

The Foxes Trust can confirm that along with other LCFC shareholders at the EGM on the 18th November 2006, it backed the LCFC boards request to proceed to the next stage of the process for Milan Mandaric's takeover of the club.

As the next stage of the process will focus on legal and financial processes, all parties will be able to make little comment in the weeks ahead, as stated by the takeover code, therefore the Foxes Trust will only be able to make very limited information available to its members and the wider fan base.

For details on the likely timescales, we would recommend listening to the Radio Leicester interview of Andrew Taylor which followed the EGM, a link is provided here (requires realtime software to listen)

http://www.bbc.co.uk/leicester/realmedia/sport/2006/11/lcfc_andrew_taylor_18nov2006.ram

 

 

Looking at the Alternatives

Having looked at issues surrounding the Mandaric bid in this article the Trust looks at various alternative funding options the City Board might put to shareholders at the EGM this weekend. 

Back in June then newly appointed City Chairman Andrew Taylor answered questions from Trust members re the clubs finances & what he & his colleagues on the Board were doing to bring additional finance to the club. 

Below we repeat some of Andrew’s answers & ask if they are still  & how they compare, favourably or otherwise to takeover bid… 

In answer to a question about the level of the clubs’ debt & owning the Walker Stadium Andrew replied… 

First, let's be clear about the level of debt. The only (significant) debt the club has is in the stadium. It's not a case of clearing debts and then working on buying the stadium. It's simply a case of working out what we do to fund the acquisition of the stadium. One of the ways to do it was to joint venture our interest in the stadium. There was some opposition to the Tigers ground share. Much of the criticism was well intentioned but emotive and ill informed when the underlying objective was to find a way of protecting the long term future of the club at the Walkers. The ground share remains one of the ways that we could raise the capital to do it……” 

Trust comment: Clearly then the issue of ground share is something Andrew Taylor was not (at that time) ruling out. With that in mind & knowing when members were canvassed two years ago only just over half were in favour we decided to canvass opinion again in light of the bid by Mandaric….

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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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