Takeover News & Bid Information
Last Saturday, 19 May 2007, Thakin Shinawatra's lawyer Noppadon Pattama said "What I can say now is we have tendered a bid for the team. We had to be silent because we had to follow the stock regulations as we are trying to buy a listed company" he added "The deal is not formally or legally concluded yet". Pattama also gave quotes to other Far East media saying "Thaksin has officially submitted his bid to buy the football club. There is no any official conclusion yet at this moment, but everything is proceeding well, by the end of this month, everything will be clear."
A matter of hours after Pattama's comments, the English media reported that Manchester City officials had confirmed that they remained in talks with several parties with reference to a potential takeover bid and suggested that City were unaware of a formal bid being made.
Two days later, on 21 May 2007, Noppadon Pattama confirmed that a formal bid had not been made but did say "The formal bid will be made in the next few days and we hope to get a decision by the end of the month". As of today, 24 May 2007, there have been no announcements by the Plus Markets (stock exchange) that a formal bid has been made for Manchester City Plc. Perhaps we can take what Noppadon Pattama says with a pinch of salt?
Since Noppadon Pattama's claims to the media, Wolverhampton Wanderers have been taken over by multi-millionaire Steve Morgan and reclusive billionaire Mike Ashley has acquired 41.6% of Newcastle United, launching a bid in the process.
The takeover bid for Newcastle United serves as a reminder to us all that if or when a formal bid is made for Manchester City Plc certain amounts of shares are required to achieve various milestones, for example:-
1) If an investor acquires 30% or more of a company then they must make a formal bid for the rest of the shares at the price they paid for them
2) If an investor acquires 50.1% then they will effectively have control of the company
3) If an investor acquires 75% they will be able to de-list the company from whichever stock exchange it is registered on
4) If an investor acquires 90% they will be able to forcibly acquire the remaining shares, thereby gain full ownership of the company
There is something else to consider and that is for the majority of companies when you acquire 75% of the shares you will not require the approval of shareholders to undertake transactions. In practice that would mean that, like the Glazers' takeover of the Club down the road, when 75% of the shares are owned debt could be transferred to the company. Also, with 75% of the shares owned changes could be made to the memorandum and articles of association.
Going back to Newcastle United, it is clear that Mike Ashley's bid has taken Freddy Shepherd by surprise. Freddy Shepherd owns 29.8% so without acquiring these shares Mike Ashley will not get to the 75% milestone. It will be interesting to see how the takeover bid for Newcastle United pans out.