Bill 13,717 Posted August 21, 2018 Share Posted August 21, 2018 2 hours ago, the gunslinger said: Thats mathamatically wrong. Say they are at 25 percent. And we are issuing more shares. They have to get some to stay at 25 percent. Indeed they can get some and drop below 25 percent. Is that not what I said? I'm assuming the concert party will be taking their full allocations - otherwise what's the point of this issue? 0 Quote Link to post Share on other sites More sharing options...
Walterbear 557 Posted August 21, 2018 Share Posted August 21, 2018 I seem to recall reading that if the concert party or perhaps just King go above another threshold (could be 50% or something) then they are obliged to make a further offer. Could be wrong perhaps FS or some financial person can advise. 0 Quote Link to post Share on other sites More sharing options...
forlanssister 3,114 Posted August 21, 2018 Share Posted August 21, 2018 11 hours ago, Bill said: I guess it depends on your definitions. As far as I’m concerned, they’re increasing their stake. They’re investing more money and acquiring more shares so they’re increasing their shareholding in the club - their stake? You’re taking “stake” to mean percentage of shares rather than the number and value of those shares. In any case, since not all shareholders are being given an equal option to buy more shares, those who do so must also be increasing their percentage shareholdings. They really aren't increasing their stake at all and that's a fact. They aren't investing a penny more all they are doing is exchanging a proportion of their loans for equity. If they were to increase their stake then they would fall foul of the law, the main point of this exercise is not to fall foul of any law or rules. No member of the "concert party" will be increasing their percentage holdings in this issue not by any valid definition. 0 Quote Link to post Share on other sites More sharing options...
forlanssister 3,114 Posted August 21, 2018 Share Posted August 21, 2018 1 hour ago, Walterbear said: I seem to recall reading that if the concert party or perhaps just King go above another threshold (could be 50% or something) then they are obliged to make a further offer. Could be wrong perhaps FS or some financial person can advise. That's in regards to the offer that the Takeover Panel said King must make, this issue however has the effect of eliminating the possibility of King having to proceed with a mandatory offer. This is a very clever move by King and the Board and is undoubtedly to the benefit of RFC. 1 Quote Link to post Share on other sites More sharing options...
buster. 5,194 Posted August 21, 2018 Share Posted August 21, 2018 4 minutes ago, forlanssister said: That's in regards to the offer that the Takeover Panel said King must make, this issue however has the effect of eliminating the possibility of King having to proceed with a mandatory offer. This is a very clever move by King and the Board and is undoubtedly to the benefit of RFC. Glad to hear it, coming from your goodself ! 0 Quote Link to post Share on other sites More sharing options...
Bill 13,717 Posted August 21, 2018 Share Posted August 21, 2018 3 minutes ago, forlanssister said: They really aren't increasing their stake at all and that's a fact. They aren't investing a penny more all they are doing is exchanging a proportion of their loans for equity. If they were to increase their stake then they would fall foul of the law, the main point of this exercise is not to fall foul of any law or rules. No member of the "concert party" will be increasing their percentage holdings in this issue not by any valid definition. Is this a test? Of course they ARE investing in new shares. They're buying their shares with the money they get from having their loans repaid. That's what a debt-equity swap is. The money they loaned the club isn't an investment, it's a loan. The club may have invested that loan in all sorts of things but the people who made the loans didn't invest it. To acquire new shares they have to invest. What's hard to understand. ? How can anyone invest in new shares (while other shareholders don't or are not allowed to, as is the case here) and not increase their % shareholding - unless they buy so few shares compared to other allowed investors that their % drops, and that's not going to happen if they want the loans repaid. Am I missing some vital bit of information here? 0 Quote Link to post Share on other sites More sharing options...
buster. 5,194 Posted August 21, 2018 Share Posted August 21, 2018 (edited) 8 minutes ago, Bill said: Is this a test? Of course they ARE investing in new shares. They're buying their shares with the money they get from having their loans repaid. That's what a debt-equity swap is. The money they loaned the club isn't an investment, it's a loan. The club may have invested that loan in all sorts of things but the people who made the loans didn't invest it. To acquire new shares they have to invest. What's hard to understand. ? How can anyone invest in new shares (while other shareholders don't or are not allowed to, as is the case here) and not increase their % shareholding - unless they buy so few shares compared to other allowed investors that their % drops, and that's not going to happen if they want the loans repaid. Am I missing some vital bit of information here? I'm only a non-expert and far be it from offering a Captain of Industry any advice on his area of 'expertise', I'd offer a simple opinion. It looks like conversion opposed to investment. Edited August 21, 2018 by buster. 1 Quote Link to post Share on other sites More sharing options...
Bill 13,717 Posted August 21, 2018 Share Posted August 21, 2018 Just now, buster. said: I'm only a non-expert here talking and far be it from offering a Captain of Industry any advice on his area of 'expertise', I'd offer an opinion. It looks like conversion opposed to investment. I'm not a corporate lawyer but I'd say it's a conversion AND an investment. The only interesting detail is the timing of each although that's purely a notional accounting construct. Where are all our accountant types when you need them? 0 Quote Link to post Share on other sites More sharing options...
forlanssister 3,114 Posted August 21, 2018 Share Posted August 21, 2018 2 minutes ago, Bill said: Is this a test? Of course they ARE investing in new shares. They're buying their shares with the money they get from having their loans repaid. That's what a debt-equity swap is. The money they loaned the club isn't an investment, it's a loan. The club may have invested that loan in all sorts of things but the people who made the loans didn't invest it. To acquire new shares they have to invest. What's hard to understand. ? How can anyone invest in new shares (while other shareholders don't or are not allowed to, as is the case here) and not increase their % shareholding - unless they buy so few shares compared to other allowed investors that their % drops, and that's not going to happen if they want the loans repaid. Am I missing some vital bit of information here? Definitely missing something. The whole point of the exercise is that members of the "concert party" DON'T increase the stakes (yet!) but DO maintain their current stake. By doing that and ensuring the new shares are in friendly hands they effectively castrate the Takeover Panel ruling as there can't be enough acceptances to force a mandatory offer. The loans were made as it simply wasn't possible to invest via equity at the time, the loans will never be repaid but they will over a period of time be converted to equity. 4 Quote Link to post Share on other sites More sharing options...
Bill 13,717 Posted August 21, 2018 Share Posted August 21, 2018 Just now, forlanssister said: Definitely missing something. The whole point of the exercise is that members of the "concert party" DON'T increase the stakes (yet!) but DO maintain their current stake. By doing that and ensuring the new shares are in friendly hands they effectively castrate the Takeover Panel ruling as there can't be enough acceptances to force a mandatory offer. The loans were made as it simply wasn't possible to invest via equity at the time, the loans will never be repaid but they will over a period of time be converted to equity. Converting to equity IS redeeming the loans. How could it be otherwise. 0 Quote Link to post Share on other sites More sharing options...
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