Part 4 - What’s gone/going on at Arsenal?

Going back to the very start of our current shares upheaval it seems clear that most of what has transpired has come about because AFC shares were undervalued in the market place. That is to say they were selling for much less than they were worth. That's not altogether surprising really, due to the perceived possibility of major financial problems thanks to the major debts accrued during the development phase of our new stadium. Plus the unknown factor of attendances which had yet to be established at a new and bigger stadium. Plus the not altogether conclusive viability of selling Highbury Square. But as it turned out, at £4,600 and less, the shares were grossly undervalued and attracting some financial speculators who could see a ‘quick buck’ opportunity. Even at £7,000 a share I was advised to expect at least a 25% rise thanks to the forthcoming sales of the Highbury Square properties. Usmanov, incidentally, is currently hoovering up any shares he can lay hands on at over £10,000 a share.

What’s gone on at board level is that David Dein was kicked off the board for reasons that have yet to be explained, but which have been referred to as 'irreconcilable differences’ with the rest of the board. It’s widely believed however that he attempted to get another board member to flog their shares to Kroenke. His dismissal came as a shock to Dein because he clearly wasn’t expecting it to happen. Taking it back one step before DD's dismissal you will recall that Stan Kroenke purchased ITV’s 9.9% of the shares and then revealed that he owned 12.19% of the Club. Kroenke by the way is seemingly still at odds with ITV over the media rights, because it is believed, the definition of the rights have not been fully sorted. At this stage Kroenke was perceived as the bad guy and Hill-Wood rashly made his inane 'we don't want his sort' comment, which I suspect he now deeply regrets.

When David Dein left the scene of the ‘crime’ he and Stan Kroenke were apparently mates, but not any more because they too have fallen out it appears. If I had to guess why it would be perhaps because DD failed to deliver on a promise to Stan Kroenke about obtaining him some more shares or that he wasn’t prepared to let Dein speak on his behalf. But I don’t know that to be a fact.

DD had been at odds with our current board whilst he was still a member of it essentially but not entirely because he was not in favour of an expensive new stadium build. Retrospective thinking could perhaps indicate that he didn’t want the Club to go into debt because he felt it would effect team spending, as it clearly did. Then again it could just be that DD wanted to sell his shares even at that time and thought a new stadium could have reduced the value of his shares. Who knows? Not being in control at Arsenal has clearly upset him and at the time he left it was reported that he was proclaiming to certain parties that he'd be back.

We do know that the one-time buddies Fiszman and Dein have not been seeing eye to eye for quite some time and with Fiszman having the greater shareholding it was he who clearly held the whip hand. Since Dein was given the directorial elbow the board have made it pretty clear, without saying so directly, that they, particularly Fiszman, didn’t want him back at any price. When Dein finally sold his shares I felt Hill-Wood overstepped the mark however with his ‘We always thought David was a seller’ quote. Given that Hill-Wood sold his shares to Dein in the first place this was very definitely a pot calling the kettle black scenario.

All the original speculation pointed to Dein believing that a change of ownership would be in the best interests of the Club and that new investment was needed, which still seems to be his mantra. Although it sounds more like a bleat now thanks to the perpetual repetition. At the time that new ownership was perceived by Dein to be best coming from Stan Kroenke. Not that anyone can say for sure that Kroenke wanted to take over because Kroenke himself has remained silent throughout other than revealing his share interest to the Club. In fact we still don't know what his intentions are, so at the very least you have to figure him to be a pretty fine poker player, or maybe just very shy.

So speculating further it appears that Dein looked for a new playmate and found a suitably rich one in Usmanov. When I say suitable I mean suitable for Dein to pick up a tidy £75,000,000. Clearly then Dein is a man who loves the Club so much he doesn’t want to retain a penny of personal interest in it, yet still yearns to be chairman. Prior to this many Arsenal fans were also Dein fans, myself included, but not anymore.

As it stands now the shareholders scores on the doors are: Fiszman 24.11%, Usmanov (or Red & White Holdings if you are a PR man) 21%, Lady Nina 15.9%, Kroenke 12.19%, Richard Carr 4.4%, the rest of the board have less than 1% each. There are also over 21% of shares held by about 1,200 minor but now very important shareholders, many of whom are fans. The above figures are changing on a daily basis, except for the board who because of their agreement can neither buy nor sell until April 2008.

What you need to understand next then is that if the shareholding of any individual or group goes above 30% then they must offer to buy everyone else’s shares at a price that they have paid in recent trading. After 30% the next magic number is 50.1% because if you control 50.1% of the shares you control the Club. It’s yours to do what you want with so long as you stay legal and you get it rubber stamped. So what this means is that if a potential take-over is on the cards it’s highly unlikely that they would go above 30% ownership unless they were sure of reaching 50.1%. Let’s just hypothesise that Usmanov, or far less likely now, Kroenke got to 30%. That would mean they would have to offer to buy out all the remaining shareholders at the going rate of the shares, which is currently £10,000 plus. If they then only managed to buy another 19%, taking their holding up to 49% it would cost them a hell of a lot of money and they'd be no more in control than they were at 30%. The way big money men play such games however is not usually a game of chance. It’s a game of strategy where someone with a large shareholding might change sides at the last minute and then it’s game over.

The board in response to all the speculation have indicated that they are united in their intent to not sell their 45% of the shares and that they have friends who would account for an additional 5% which would block any take-over. This means they are currently convinced they can prevent a take-over. After 50.1% the next target is a 75% shareholding because then you effectively do whatever you want without conferring.

Bearing all that in mind you can perhaps see why I believe Dein probably approached a fellow Board member with a view to them selling their shares to Stan Kroenke. The most likely shareholders to approach, given their major shareholdings, would have been Danny Fiszman or Lady Nina. Had Dein succeeded he could have retained his own shares, teamed with Kroenke and not been too far away from the required 50.1% after he'd got Kroenke to take a few more from Dein's friends and the hedge funds. But that didn't happen, if it had and if Kroenke had obtained majority ownership it wouldn't be a massive stretch of the imagination to suggest that David Dein would have been his ideal man to place in charge of AFC. Certainly in Dein’s eyes and possibly Kroenke’s at that time.

Since that time the whole ball game has changed with the very rich but shareless Dein proclaiming his undying love for the Club, claiming to have persuaded Wenger to stay and suggesting that he is potentially the new AFC messiah. But in doing so it seems he is falling increasingly out of favour with the fans because he's fairly obviously sold his soul to the devil. I’m talking money here and not Usmanov, although there are quite a few who would have assumed I was referring to Usmanov as a result of some now suppressed web articles which were a very long way from being flattering. Red and White Holdings, as the PR men prefer Usmanov and his puppets to be known, makes Dein appear to be little more than a rather greedy Trojan Horse in his quest for power. Fans are not always perceptive due to the red tinted glasses factor, but I believe double-D is very definitely no longer the blue-eyed boy in the eyes of your average Gooner. Things change quickly in football David, as you should have been aware.

So the battle has started even if we're still not sure who will be fighting alongside whom. It certainly won’t be pretty and could turn nasty and in one way or another it will involve Fiszman, Dein, Lady Nina, Usmanov and Kroenke. Who knows how it will end up, or how many further twists, turns and knifings in the back we have yet to witness. Minor shareholders such as Hill Wood may yet sell, because he’s done it before. Fiszman has said he won’t sell but as much as I’d love to believe that he could yet be our white knight in shining armour I'm not entirely convinced. I know he's told the Arsenal Supporters Trust he's not looking to sell but didn't actually say that he would never sell. Why would any sane individual believe that a clever tax-exiled businessman won’t sell if the price is right? Does anyone know why Fiszman wouldn't sell, other than the fact that he seemingly doesn’t want Dein back at any price? Likewise Lady Nina is safeguarding what is effectively a family inheritance, but how many of those have been sold off in the past few decades?

Arsenal shareholding fans may not be able to resist the rich cash offer of over £10,000 per share bearing in mind that the majority of small shareholders purchased in the first place for less than a couple of hundred quid. And most did so just to attend the AGM and become one of the numerous owners of the world's greatest football Club. If these fans get together and stick together they can between them quite possibly decide our Club’s future. So please, please, please, if you do own shares don't go for the quick buck, at the very least hold off and think about it. If you own shares and are reading this I can only presume you are a fan, so if you must sell at least attempt to sell to a fellow fan. I would suggest that individually you might be picked off as just another pawn in the game. Collectively the fans, the real fans with shares no matter how few, might yet decide the destiny of the Club. It figures therefore that if you act together you may yet prove to be a very important factor if and when war breaks out. So please think very carefully.

Right then, that’s pretty well the battleground laid out for you for the forthcoming war games. Except it won't be a game because the winner, should there be one, gets to decide the destiny of our Club and unless you own a share there is nothing you can do about it other than take sides.

Actually what will probably follow next is a kind of phoney war because as Keith Edelman reiterated in his recent question and answer feature on Arsenal.com. For Technical reasons relating to the takeover and company rules no one can exceed 30% of the shares, even if they wanted to until April 2008. So late spring of 2008 could see it all kick off again. I can’t imagine though that there won’t be numerous attempts to wheel and deal in the meantime. Even if we don’t get to hear about it you can be pretty certain that it will be happening.

The latest news from the Russian press (20th September) reports that Usmanov intends to up his holding to 25% in order to obtain what he refers to as a blocking stake. Which as I understand it means the ability to block special resolutions and major rule changes if he doesn’t like them. He claims he will then wait for his shares to go up in value. Personally I find that a bit hard to swallow given that he has recently purchasing shares for £10,250 at a time when everyone else was trading at around £8,250. That signals to me that he wants as many as possible at any price. But who really knows, there could yet be a Russian, or in this case Uzbekistan, oligarch who tells the truth and has honourable intentions. That said I think he’ll go for a takeover, which will be even less welcome than Cashley coming back to AFC to play for the Chavs.

What is now certain and has been confirmed by the Club’s recent highly impressive financial results, is that the Arsenal Football Club has absolutely no need whatsoever of additional financing. Furthermore it certainly does not require an obscenely rich Uzbek to stick his murky oar in AFC's current crystal clear and fast flowing waters. I don't like the idea of anyone paying over the odds for shares that they are only interested in for the sake of making a fat personal profit. Usmanov’s share trading in AFC will be of no benefit to the Club and certainly none whatsoever to the fans. The Club have also made this quite clear in the recent financial report without actually spelling it out in four or three letter words, or if you prefer ‘Foxtrot’ ‘Oscar’ Usmanov. So if he does, as some fear, attempt to takeover the Club it will be a hostile takeover. And if such an attempt is made, despite any bullsh*t Dein might come out with on behalf of Red and White, Usmanov is only in it for Usmanov and not for the benefit of the Club.

If you want to keep up with events as they unfold, and you should, I’d suggest you keep an eye on the following websites: