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Silent Stan is the man with the plan

Silent Stan is the man with the plan

The news that Stan Kroenke was planning to takeover Arsenal Football Club broke yesterday after the Blackpool game but was heralded by vaguer rumours earlier in the week. Now it has been formally confirmed on the clubs website following an announcement to the markets this morning.

The offer commits to continuing to operate in line with the existing self sustaining policy and states that the offer will not be funded by debt finance secured against the Club. Kroenke has also said he has asked the current board of directors Peter Hill-Wood, Ivan Gazidis, Ken Friar, Sir Chips Keswick and Philip Harris to remain in place.

The price offered is £11,750 per share for which he already has agreed options to purchase Danny Fiszmans`s 10,448 (16.11%) and also has irrevocable undertakings from Lady Nina and the other Arsenal directors holding shares, other than Fiszman and himself, to accept the offer. The options on Fiszman's shares are to be exercised no later than 20 business days after Fiszman's death which, with it's tragic undertones, seems to be a mechanism to allow KSE the cash position to fund any shares that he is forced to buy under mandatory takeover rules. The current undertakings gives him an interest in 62.89% of the total issued share capital of the club and therefore he already assumes effective control of the club.

Kroenke has issued the following statement "We are excited about the opportunity to increase our involvement with and commitment to Arsenal. Arsenal is a fantastic Club with a special history and tradition and a wonderful manager in Arsène 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."

Peter Hill-Wood in paying tribute to Danny Fiszman`s involvement with the club and that of the Bracewell-Smith family said "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."

Arsene has also apparently endorsed the takeover saying that "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."

With Stan Kroenke set to own at least 62.89% it is not known how many other shareholders will take up this offer. Usmanov's Red & White Holdings owns a little over 27% which would seem to leave less than 10% with small shareholders. If Usmanov were to take up the offer it would give Kroenke Sports Enterprises more than 90% which under stock market rules could allow them to compulsorily purchase the remaining shares though his endorsement of the Arsenal fanshare scheme would suggest this is unlikely but the offer document acknowledges the possibility in given circumstances.

So is it a good thing for the club or not? There was a problem of succession with Danny Fiszman`s shares which given the 66 year olds poor health would have needed to have been resolved sooner rather than later and Lady Nina's shares have been on the market for some time. This at least adds certainty to those open issues and prevents the less popular Usmanov from extending his influence over the club. Whether Usmanov now sells out could be significant as currently his blocking stake provides some sort of protection against increasing debts if that were his inclination.

There is some comfort in that this isn`t a cold takeover. Kroenke has been involved with the club as a shareholder since 2007, was appointed to the board in September 2008 and actively running it with the support of Fiszman for sometime so he knows how the business has been run and has helped to shape it. Ivan Gazidis was his appointment and it is he who will give a video interview on the takeover to be posted on the club website soon.






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Writer:Amos
Date:Monday April 11 2011
Time: 9:13AM

Comments

0
Pre season tours to the States and the Far East inbound. Not saying it's a particularly bad thing, but he will certainly want to exercise any additional commercial opportunities we don't currently take advantage of! Interesting now to see if the fat Russian hangs around.
navydave
11/04/2011 09:31:00
0
I think I feel ok about this. At first I was a bit concerned, but I think things have been handled correctly. Silent Stan has carefully plugged away in the back ground, learning the traditions of the club. One concern from many fans is that his nationality could mean he does not "get" our club, I'll admit that crossed my mind too, then I realised how hypocritical that would be of me. I'm a massive fan of American motorsports, I mean I love it almost as much as I love football, and I've been told on more than one occassions that I don't "get" the sports, because I'm from England, and that's just not true. So yeah, I think this is ok.
Rocky7
11/04/2011 09:47:00
0
I would have preferred for plurality to be maintained, so I'm a little uncomfortable with it, but at the very least, he appears to have the support of the current board and won't leverage the buyout. I think he sees the club is run well and that there's no reason to change that, but the bottom line is he's a businessman and he'll want a return. I would expect a much more aggressive commercial strategy in the coming years. I do hope ticket prices don't become out of control.
Little Dutch
11/04/2011 10:02:00
0
I think that this years price hike will teach him quickly that that is not the way to go. By the sounds of it there are going to be a lot of people not taking up their tickets next season, any further price hikes would only compound the situation.
Rocky7
11/04/2011 10:14:00
0
For KSE to get a return the business will have to start paying dividends at some point in time. To be able to do so without compromising our existing ability to invest in the playing squad they'll have to increase revenues. That is more likely to come from commercial development than ticket prices. That's where KSE's strengths lie. The current sponsorship deals begin to unwind around 2013 and that's when the commercial revenues are likely to see significant gains - providing the club continues to be successful - and that's when dividends may be paid. Will Usmanov hang around for them? Either way little will change for the next few seasons at least.
Amos.
11/04/2011 10:39:00
0
Also suggestion that, given Stan's interest in broadband, that we could make commercial gains with lucrative overseas TV/ online streaming deals. Good piece on Swiss Ramble that says with all of his US sports interests, he hasn't only bought the club, but bought local cable/ TV stations too. He seems wily with things like that. My only concern is that trends suggest his teams prosper for a few years, then his interest wains and he moves his eye to other sports teams and there's a consequent drop off in fortunes. Also, whilst the board is the same for now, I rather think that could change in the next year or so and we'll see more of "his" men.
Little Dutch
11/04/2011 10:49:00
0
I don't think it would be too much longer till the bpard had to change anyway, I mean how old is PHW now anyway? One hundred? two hundred years old? Maybe we've been seeking all along for a long term replacement to ensure the club is in safe hands, the objection to thst greaseball Usmanov, and then the welcome of Kronke (for the most part) is clear indication that the current board were always looking to do things the Arsenal way.
Rocky7
11/04/2011 11:00:00
0
PH-W and Sir Chips are both in their 70's (75 and 71 respectively) so they won't hang around for ever. At the moment though they both give high level access to 'old money' which could be helpful to KSE in the short term. Arsenal has already become more corporate and that will inevitably be reflected in the board before long. KSE is able to generate money from sports interests so in that sense they do bring expertise and some value to the club.
Amos.
11/04/2011 11:05:00
0
Ken Friar is 78 while Philip Harris (aka Lord Harris of Peckham) is a sprightly 69.
Amos.
11/04/2011 11:09:00
0
I do hope ticket prices don't become out of control - Little Dutch. Would you consider them fair and under control now?
LondonGooner
11/04/2011 11:38:00
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