Kroenke launches takeover

*Originally posted 11th April

As was reported shortly after our win away to Blackpool yesterday afternoon Kroenke Sports Enterprises, owned by E. Stanley Kroenke has increased it’s shareholding in the parent company of Arsenal Football Club, Arsenal Holdings PLC.

After purchasing the shares of Danny Fiszman (16.1%) and Lady Nina Bracewell-Smith (15.9%) KSE is now in control of 62.89% and has agreed to make an offer for all remaining shares at a price of £11,750 per share.

 
I am by no means an expert on financial matters so I will not attempt to trivialise things here. The most important aspect, in the short term, in my own view is the fact that KSE have made it clear in their statement to the Stock Exchange that no debt will be leveraged upon the football club as part of this take over –

“The offer will not be funded by way of any debt finance (banks loans, payment in kind loans or other debt or quasi-debt interest bearing obligations) for which the payment of interest on, repayment of or security for any liability (contingent or otherwise) will depend on the business of Arsenal.”

This is a significant change as to how the club has previously been owned and now may not be the best time to speculate upon the pro’s & con’s of these changes, I think for the moment we have to take everything at face value. All statements & comments from the main players seem to be saying the right kind of thing so far

Kroenke himself has said –

“We are excited about the opportunity to increase our involvement with and commitment to Arsenal”
“Arsenal are a fantastic club with a special history and tradition and a wonderful manager in Arsene Wenger. We intend to build on this rich heritage and take the club to new success. I am delighted that Peter Hill-Wood has agreed to support us by continuing as chairman We especially wish to acknowledge and thank the board, Danny Fiszman and the Fiszman family as well as Lady Nina Bracewell-Smith and her family for the confidence they have had in me over the past years and in allowing us to move forward in this more prominent role.”

There were a lot of rumours yesterday that former vice-chairman David Dein could return to the club, replacing Hill-Wood as Chairman, but clearly that seems not to be the case, at least for now.

It was of course Dein who tried to convince the board in 2007, when Kroenke first acquired 9.9% of shares, to deal with the American. At the time chairman Peter Hill-Wood was vehemently adamant that the board were not prepared to play ball saying –

“We don’t need his kind and we don’t want his sort. He knows sweet FA about football”

However there was soon a change of heart as ‘Silent Stan’ as he is known, for the fact that he keeps he’s own council rather than sound off in the media, was invited onto the board in an attempt to Block Red & White Holdings, a company owned by the Uzbek oligarch Alisher Usmanov, from launching a hostile takeover.

Usmanov had acquired 14.58% of shares in the club at a cost of around £75m from Dein who had been ousted from the club in the wake of initially backing Kroenke.
During the course of the American Billionaires involvement with the club at board level, Hill-Wood seems to have softened stating in the wake of the latest deal –

“The board of directors and I consider it a key responsibility to protect the ethos and spirit of the club. Mr Kroenke, although relatively new to Arsenal, has shown himself to be a man who values and respects the history and traditions of this very special club that we cherish. We are confident that he will be a safe custodian of its future.”

Manager Arsene Wenger has also backed Kroenke –

“I have worked with Stan Kroenke at board meetings over the past couple of years and I believe he has the best interests of Arsenal at heart, he understands the club’s heritage and traditions and our ambition to run the club in a way which protects our long-term future.”

It remains to be seen how Usmanov (Red & White Holdings) will react to the offer for their shares, but as they are unlikely to be invited onto the board their 27% of shares holds very little sway and selling to KSE would surely be the only sensible course of action. It would also meant that Usmanov would make a significant profit on the shares he has been gradually acquiring since snapping up those of David Dein, and this in truth is more or less what most had suspected he wanted from the club – a profit.

So now things have changed from how I and all Arsenal fans have known them and we wait to see what happens next…
I will of course post updates as and when we get them via Twitter

Until then,

 
Up The Arsenal!

 

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