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Unless I’m missing something, Skipper’s solution doesn’t solve anything…does it?

Former vice-chairman Barry Skipper has revealed his solution to “stand-off” between the current board and Peter Cullum in an exclusive* article ran in the Pink’Un.

I’ve had a chance to read it through a few times, and I can see some holes. One at a time…

I don’t think any existing shareholder has ever paid more than £25 for a share, so let’s settle for that as fair value instead of £30

Oh then let’s settle for £25 per share. The stock-market has gone down recently, so why not settle for £20? Or £15? We’ll go with £25 though as it saves me having to do a lot more maths than I want to.

Mr Cullum buys the authorised but unissued shares for £833,325, which would give him a 5.86 per cent shareholding.

Yep. With you so far.

Mr Cullum then buys the other board members’ shares for £593,675, which takes him to 10.06 per cent.

Ok I’m still following, but presumably that includes the Turner’s shares?

Mr Cullum then buys 23.77 per cent of Delia and Michael’s shares for £3,379,450, giving him 33.83 per cent.

No problems with that.

This takes him to the point where he must offer all shareholders the same price as he has paid already. But these shares are owned by supporters. They are not holding these shares as an investment. Many only have 100 shares. They are not interested in cashing in for £2,500, just as things could get interesting, but they do account for 32.36 per cent.

Mr Cullum could safely calculate that he would not get many takers. Thus the total cost to Mr Cullum is £4.8m.

This is the point when it all goes a bit skewy. Has anyone done any research into how many of these shareholders would want to cash in their chips? It seems a pretty massive assumption to make that nobody will (which is how you get to £4.8m). I’m not a shareholder myself so I don’t know the reality.

Back to the Turners. If their shares have now been snapped-up – and by a billionaire no less – why should they not insist on getting their £2m back? They’ve effectively just been ejected from the party haven’t they?

And what of the question of control? Mr. Cullum understandably wants to have control if he is to invest in the club, but under Mr. Skipper’s solution:

You don’t necessarily get it. We must remember that one third of the club is owned by supporters at the moment but they don’t have a say. This way they can have a say.

So it doesn’t suit anything does it? Or have I missed the point completely and this is a brilliant plan?

*And the answer to the question “when is an exclusive not an exclusive?” When the exact same story appears on your sister-site ten minutes earlier.
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Discussion

One thought on “Unless I’m missing something, Skipper’s solution doesn’t solve anything…does it?

  1. This whole situation is beginning to worry me now. We have no squad and takeover uncertainty. Hardly ideal preparation is it?

    Posted by thomasrooney | July 3, 2008, 3:52 pm

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