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Why has the Arsenal board recommended acceptance of Kroenke’s offer…

…and by extension the termination of the much heralded Fanshare Scheme?

13 April, 2011 10:00 16 comments
Why has the Arsenal board recommended acceptance of Kroenke’s offer…

Fanshare: The directors giveth and then taketh away?

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In recommending acceptance of Stan Kroenke’s Offer, the board of Arsenal has recommended that Arsenal be owned by one person. In one fell swoop the directors have turned their backs on fan ownership of the Club, supporter involvement in the Club as owners, the Arsenal Fanshare Society and pluralists of ownership and possibly custodianship.

They have recommended that fans be excluded from the ownership structure. They have recommended the end of Arsenal Fanshare. Why then has the Board recommended that the KSE Offer be accepted?

The Board, are under no obligation to recommend the Offer. The Board has to act broadly in the best interests of its shareholders and have a duty to consider an Offer in all the circumstances. It is not simply a case that if they agree the price it is a fair price for the shares, they have to recommend the Offer.

For example, supposing an Offeror made an offer to acquire all the Arsenal shares at say £15,000 per share, considerably more than the KSE Offer, but that Offeror wanted to borrow money against the assets of the Club in order to fund such Offer? Would the board have recommended such an Offer? Maybe they would not have done.

Further, suppose the Offer had come from a person of possibly dubious background and someone the board did not feel was the right person to own the shares? Once again, presumably the board would be able to reject that Offer? So the recommendation for shareholders to accept the Offer is not based purely on price. So why has the Arsenal board decided to make such recommendation?

Would it have something to do with the fact that with 60% of the shares KSE can appoint and remove directors as it feels fit? Why has the board, who have been so in favour of Arsenal Fanshare now recommended that it be extinguished? Does the Board really recommend that Arsenal supporters be excluded from the share register?

Did the Board really want to sell their individual shares to KSE? Of course once the Board had recommended shareholders accept the Offer, each director had no option other than to sell the shares in Arsenal that he owned under that Offer, otherwise how could it recommend other people accept an Offer when they do not do so themselves?

However, in doing so, they have effectively given a green light to the end of supporter ownership and the Fanshare scheme, pocketing a decent sum without losing their directors’ privileges. Nice one.

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16
comments

  1. Nic

    Apr 15, 2011, 9:48 #5135

    Isn't it just that it would have been a hostile takeover if they hadn't recommended it and that would not have been good for the club(?).

  2. Graham Yates

    Apr 14, 2011, 16:28 #5126

    What would have happened to Fiszman's shares if he did not sell before he passed away? Maybe the reason for such as swift transaction was purely this reason alone. Say Usmanov got in there with these "unowned shares" then maybe it could & would have been a hell of a lot worse for us fans. Kroenke actions seem admirable if only for the fact that Red & White Holdings don't have the lions share. As long as Usmanov & Kroenke are involved plurality will remain.

  3. Gman

    Apr 14, 2011, 14:08 #5122

    The only reason the Board recommended selling up to KSE was to keep themselves on the Board, trouser loads of dosh and not let David Dein with Red and White Holdings get back to exact revenge on them. Nothing altruistic with regards to the club then?

  4. JDB

    Apr 13, 2011, 22:07 #5106

    Respect to Danny dont know the guy but I think he done what he was best for all concerned and sad to hear he passed away. If his family don't has his level of interest in the club he had 3 options. Kroenke, Usmanov sell to wider market. Selling to his preferred buyer must be respected 1)As I read it Kroenke has experience knowledge of US sports built teams, he knows commercial marketing (the area we are weakest in) he brings something to the club as Danny himself did. My sense is Kroenke hasn't forced the issue but 2) Usmanov could make his own move if there was a opening, not huge amount known about Usmanov, I think he is a fan but he is a guy who has got in life through driving a hard game in former USSR, what does he give the club, finance yes but not sure that is the clubs problem these days. 3) If shares were put out to offer then what? Fanshare scheme nice idea hope grows but we a talking about GBP200m+ fanshare own under GBP1m as it stands. Club now has certainty Danny has ensured that, sure he wished to be around to see the club win a final trophy but he gave 20 years to the club and we are better off for his role Kroenke has big shoes to fill!

  5. barnetgooner

    Apr 13, 2011, 20:37 #5100

    Has the news tonight made things a bit clearer to the writer of this article? The board had no choice but to recommend the sale to Kroenke, who else would have taken on their shares?

  6. JJB

    Apr 13, 2011, 19:18 #5095

    @ Website Editor - I understand the desire to defend the articles on your site and you are right to done degree to point out that Kroenke is not the subject of the negativity and it is the board that the assertion is being made. However I feel that the club is simply taking another battering born out of the current frustrations and malaise from the fans, understandably so. My opinion is that we should give them a little credit, I take all the points about greed and yes, money of course talks, but it is there perogative and it is unfair to clank that they have abandoned the values of Arsenal to make a quick buck. Despite the current situation with the team I think it's fair to say that the board have looked after the best interests of the club over the long term, we have a class and dignity about our club that most of our rivals can't touch. I would have loved for the club to stat out of foreign hands but the reality is that at some point a take over was inevitable, look at the amount of clubs in foreign ownership on the prem! It was going to be the American or the Russian, and based on every detail I can read scout silent stan suggests that he is the best choice on offer. 100% agree that we need to know the buyout will not be funded by any type of leveraged debt and only time will tell, but I would take a glance at our top 4 rivals.......arnt you glad our club is not in their situation? Cut the board a little slack, it cud be alot worse, I am tentatively confident of the future under KSE but again only time will tell

  7. Howard

    Apr 13, 2011, 16:18 #5092

    Final days, final days. If you're a rich man and you're in your final days, do you need money so badly that you need to sell? Can't you pass the shares to your next of kin? I mean the Hill-Woods inherited theirs so why not the Fizsman's. Its still greed - pure and simple.

  8. OUR Arsenal

    Apr 13, 2011, 15:20 #5085

    I agree that this article seems ill-advised & not in keeping with the consensus of informed opinion ie, that SK & IG back fanshare & the club aren't about to leave it dead in the water months after proudly standing behind its launch. Could somebody not find it within themselves to post a rousing article urging fans to, wherever humanly possible, get involved in fanshare? I'm not from the AST, but surely we can all see that the more of us that join the stronger we become & it'll grow. There must be countless fans who've thought about joing, but held back. Now is the time to stake a claim, albeit small. There are thousands of us out there in the Gooner nation. We can snowball. Right, I'm off to sign up ...

  9. Website Editor

    Apr 13, 2011, 14:56 #5081

    We post the views of Arsenal supporters without editorial judgement on whether or not their views are necessarily accurate. If you read the piece, the target of the accusations are the directors, not Kroenke. Obviously Kroenke is going to recommend his own offer, but what of the others. That is the debate here. As for Kroenke himself, there is no firm message that he will not use dividend payments of 'management fees' to pay off money he might loan to buy control of the club. We need such a message before we can really see Kroenke as the kind of owner we want for our football club. A simple statement would suffice and would not take 5 minutes to put together.

  10. @mjl

    Apr 13, 2011, 14:56 #5080

    Joolz, spot on. What I would add (and I have not read the other two posts) is that AFC could have handled this a bit better in communicating to the fans the implications, consequences and reasons behind the sales. The AST and others are now filling this void and i'm not sure how healthy that is at the moment. We have had a smart and successful ownership structure whilst football was developing, now we need and seem to be slowly getting an owner and executive team suited to the direction the game is heading. Not sure what there is to be worried about...

  11. s j little

    Apr 13, 2011, 14:15 #5075

    Surely you should be concentrating now on involving the govt. 50% Premier foreign owned. Fans exploited. Surely its about time all fans united in a campaign to bring the clubs back to the fans. The real club fan is quite happy with just the domestic tournaments and dont want their season ticket loaded with a lot of boring foreign games. A fixture list that is meaningless. Stupid Internationals. Payment a year in advance. What the hell are MPs for

  12. FJ

    Apr 13, 2011, 14:09 #5070

    The current board made over 10 times more on their shares than what they would've made before the stadium was built. Everything that has been done has been done in accordance with lining their own pockets.

  13. JJB

    Apr 13, 2011, 14:00 #5069

    Wow - My god, how this takeover has exposed so many fans to have very little intelligence or general common sense. Firstly, I would echo exactly what Joolz has said in his post. This whole situation has only happened due to Danny's sadly fading health, Kroenke would have been content to continue as he was, with perhaps a view to takeover further down the line. Nothing is going to change at the club! NOTHING! No massive injection of trasnfer funds, there will be cosmetic changes to personal and commercial strategy but for now, thats it. The club had to request for all shareholders to accept the offer, this was a deliberate way to hamstring Usmanov and ensure he could not make a counter offer and begin a hostile takeover battle, hence why this was announced on a Sunday night. The statement from Kroenke clearly says he is a fan of pluraity ownership and if you read about his other teams, he backs this up with his previous behaviour and conduct. Kroenke will know full well that Usmanov would be unlikely to see and in fact Kroenke would have to come up with an additional 194mill to buy his shares which I doubt he would want to do right now! This actually plays into his hands and the fans, it means the club will NOT be privately owned, the fanshare can remain in place (of which I am also a member) and we retain 2 billionaire backers. Things may change in the long term, who knows, but give the board a little credit. Yes they have recieved alot of cash but we are the last big club to be taken over and I would remind you that this has occurred due to a great servant of our club being close to his final days!

  14. Jimmy

    Apr 13, 2011, 13:22 #5067

    Well said Joolz (post 5538). I was about to start typing much the same sort of thing when I spotted your comment. I actually think its quite irresponsible of the Online Gooner to post something like this which is so blatantly wide of the mark, especially when representatives from the website and the fanzine were at the AST meeting on Monday.

  15. Judith Le'Strange

    Apr 13, 2011, 13:19 #5066

    The reason they've accepted the offer and ignored the fans is pure and simple greed to line their pockets and to hell with the fans who actually put bums on seats week in and week out and purchase the merchandise. If I was a shareholder I wouldn't sell either but unfortunately can't afford to purchase any, I just hope that he Kroenke doesn't get full control of Arsenal for everyone's sake

  16. Joolz

    Apr 13, 2011, 13:14 #5065

    You need to check the facts before you go round making blanket statements like this. Kronke has said that he is committed to the plurality of ownership and even though he has to make an offer for all existing shares he does not want to buy them. Usmanov has stated that he will not sell his shares so The Arsenal cannot go private. Also Kronke was a backer of the fanshare scheme so is highly unlikely to scrap it! You need to man up and stop being so negative, nothing has changed. Fizman is on his death bed and Nina didn't want her shares, this is the best option unless you think adding another unknown share holder to the mix that hasn't been on the board for the last 3 years and is aware of what this club means to us and how it is supposed to be run. UP THE ARSE!