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Buyer's Questions

By Greg Dawson :  30/11/2009 :  Comments (22) :
Now that the Kirkby project is no more, I believe that Everton are a more attractive proposition to a prospective buyer. This was alluded to by David Moyes in an interview last week after the Kirkby decision was published.

This change in ‘buyability’ has little to do with Kirkby itself; it has more to do with the exclusivity agreements that were in place with Knowsley and Tesco (and probably others). No buyer would want to have to honour prior-negotiated agreements for a product that they did not select.

That having been said, our problems are still very real: we are dramatically under-funded, we need a ‘new’ stadium and we have substantial debt.

If we touch on each of these in reverse order:

I’m interested in exactly how much debt we think we have? There would be the bank debt (presumably including an overdraft) which I believe was secured against future season ticket sales. There would also be personal debts that are outstanding between current board members and their associates (for example Bill Kenwright may have borrowed money off Philip Green). Personal debts would not be publicly known and would only become known during a due diligence review of any prospective deal.

With regards a new stadium, we have two choices: redevelop Goodison or build on a different site. If Everton are to stay in the city, both of these options are dependent upon the City Council. If Goodison is to be re-developed, it would appear that some additional land would be required which would mean the annexing of some of the surrounding streets (Diana Street and Muriel Street, and potentially parts of Gwladys Street) and the loss of the Gwladys Street school. In the Kirkby debate, I think I recall Councillor Bradley suggesting that this was possible. Do we have any idea what the Council's stated position is on this idea?

On the second option, the Council has offered a number of sites, and I believe they are well represented on the KEIOC website, do we know what the Council's current position is on those sites?

How much would the buy-out of the current board cost? How many shares are involved?

In order for someone to step in and buy out the current board, the above questions and many more would need to be answered.

Reader Comments

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Michael Kenrick
Editorial Team
1   Posted 30/11/2009 at 20:13:12

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Regarding the shares, there are 35,000 outstanding privately held and rarely traded shares in Everton FC Co Ltd. Around 29,500 are held by the major shareholders (Kenwright, Woods, Earl) and the rest are in the possession of various small shareholders.

Nominal share value is £1 but the price for you or I to buy one would be £1,200 to £1,400, or whatever the seller and buyer mutually agree. For example, last time the club changed hands, the shares were priced at £857, which valued the club at around £30M (ignoring the debt, which was then relatively small).


Prior to the demise of DK, people were suggesting £80M to £100M as a valuation of the club, but that is probably fanciful and is about equal to the best estimates of the current debt.

Keith Young
2   Posted 30/11/2009 at 21:22:54

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Bill Kenwright, as a director under the Johnson regime, saw an opportunity to be part of a consortium to buy control of Everton and to be its Chairman. Without sufficient funds of his own, he found "non-Evertonian" friends to help. Presumably therefore he must have convinced them that it would be a profitable investment to that type of investor.

In the circular prepared by Grant Thornton at the time, he requested other shareholders (than his backers) not to take up his offer to buy because he would have found it very difficult to come up with the money. He did not follow the path of a Rights Issue that Johnson had taken, so no new money went into the club.That remains the situation to this day.

The logical conclusion is that control of Everton is (and always has been) for sale provided he and his backers can exit with profit. All of which is perfectly reasonable provided no claim is made that the consortium’s purchase of shares "saved the club".

There is a clear need for a new Rights Issue to raise funds for the Stadium (new or refurbishment). The Board should establish the size of the issue by providing a proper analysis of how much the development would cost and what extra stream of revenue would result. Having 24/7 failed to get "investment", is there any other way to raise money for the Club?

Anthony Hawkins
3   Posted 30/11/2009 at 22:48:36

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Everyone seems to be under the impression Bill Kenwright is looking for someone to buy the club. He is NOT.

Bill is looking for investment only and is not interested in selling. Look at the recent press releases and everything linked with money is on an investment basis only. "We need new investment"; "Until we find someone willing to invest"; "We are searching for new investment".

Bill Kenwright doesn’t want to sell, end of. I never have believed and do not believe a new outright buyer has ever been sought which is why we have never seen anyone interested in Everton and other clubs have found suitors.

David Hallwood
4   Posted 30/11/2009 at 22:56:22

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On this subject I’m beginning to sound like the talking clock. Anthony, buying a company is complately different than buying a house. Read Michael’s piece at the top, and it wouldn’t do any harm to google Stan Kroenke, who is buying up Arsenal shares. In short, if there was someone out there that wanted a piece of Everton, they’d start buying the shares up, they may be rarely traded but it’s surprising what can happen when you wave £50 notes in front of someone’s face.
Frank McGregor
5   Posted 30/11/2009 at 22:52:33

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Why are we still discussing new grounds or redeveloping of existing? I believe the majority of people according to the ToffeeWeb site want to have ground share with Liverpool who also I believe have no money for development so why not sell off Goodison for luxury flat development or a hyper supermarket store and play at Anfield? That way, we would still be in the city of Liverpool and both Liverpool and Everton would not have to carry the debt of a new stadium. I personally would rather groundshare with Tranmere Rovers, the only problem with that being would not be in the city.
David Hallwood
6   Posted 30/11/2009 at 23:05:41

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Sorry forgot to add, that if BK didn’t like or want the new investor-tough, google hostile takeovers for a more complete view
Keith Young
7   Posted 30/11/2009 at 23:17:41

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Anthony, investment in the club is simply achieved by a rights issue in the first instance based on a proper assessment of the ground development proposals.

Frank’s point of course would mean that Everton would be uniquely "Going Home" and why not?

Richard Dodd
8   Posted 01/12/2009 at 08:50:38

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We hear this morning that, spurred by the Knowsley lobby, Peter Mandelson is anxious to find a way round his Minister’s dismissal of DK. I don’t imagine too many on this site will be cheering to the rafters but given the demeanour of David Moyes since the No was given to the project, I can imagine that Blue Bill will be anxious to explore any avenue that might see the new ground become reality.

Be that as it may, I do feel the very least ALL Evertonians have the right to expect is that our Chairman will now show clear leadership on this issue and do his very best to keep the fanbase informed throughout the review process.

I have confidence that he and the Board will reach the right decision on how best to proceed but having — in my view, prematurely — stated very publicly that the DK chapter is dead, he will have to put in the acting performance of his life if he is now to think of bringing it back to life!

Gavin Ramejkis
9   Posted 01/12/2009 at 09:16:41

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Doddy, clutching at straws with your strawman Chairman, fucking give it up. Black Bill has fucked up AGAIN, his latest looking for "investors" again is miles away from his bullshitism the club is for sale.

I’m expecting the usual; shithouse disappears back down his rat hole in London to avoid the well deserved flack... only to reappear if we get a decent result with some gushing luvvie bollocks. Bill we don’t want your lip-service, we want a new owner full of cash and not bullshit and lies.

Brian Baker
10   Posted 01/12/2009 at 10:57:18

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His interview is here:

http://www.everton.vitalfootball.co.uk/article.asp?a=179408

Interestingly Moyes is talking about finding a buyer, whereas BK has always talked about investors.
He also blames the indecsion over Kirkby for keeping away perspective buyers. He also mentions the possiblity of re-developing GP, which is also very interesting, as we have been led to believe by board members, prior to the Kirkby decision, that this is a non-starter.

Do I detect a difference in opinion between Moyes & BK when it comes to potential investors / buyers?

Selling the club to a new owner, does carry its risks, as we don’t want another Mike Ashley. So it has to be the right person.
Also, is it vital that an Evertonian owns the club?
Anthony Hawkins
11   Posted 01/12/2009 at 11:19:48

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I do realise buying a business is different than buying a house however it STILL relies on other selling or reliqueshing shares. Shares can not be bought if there are non available unless a certain percentage is reached. If that percentage is not obtainable, the person can not purchase the club.

Everton could have made a rights issue however they haven’t.

...Let’s not forget that a hostile takeover is simply a potential suitor putting in a bid without talking to the board first. All of these options STILL rely on the board say yes!
Graham Atherton
12   Posted 01/12/2009 at 11:19:30

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Realistically the chances are that we are going to stay at Goodison. We dont have the capital or income to do much else other than gradually redevelop and that may well not be a bad thing in many ways.
Snag is it will probably take many years to achieve and during that time we will only be incrementally increasing income.
We are looking at mid table finishes for many years to come but the sooner we start this process (CPO’s Mr Bradley??) the better.
Brian Donnelly
13   Posted 01/12/2009 at 11:48:35

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Doddy, obviously you are right when you mention the effect that the Kirkby rejection has on the demeanour of David Moyes. It must have been a crushing blow for Moyes.

I suppose the spineless, gutless performance at Hull on the same night may also have had a small effect. This followed by the derby defeat and languishing 16th place in the league may have also added, ever so slightly, to his gloomy demeanour.

It goes without saying really that Moyes would have been his usual smiley self if DK had got the go ahead. Oh well, we can still hope that BK didn’t quite speak the truth, for once, when he said Kirby was dead and we can spend another couple of years dreaming of the Utopia that is Kirkby.
Liam Reilly
14   Posted 01/12/2009 at 12:36:00

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Looking at the latest financial results on the OS, it doesn’t make positive reading for any potential investor.

http://www.evertonfc.com/news/archive/financial-results-announced.html

In a nutshell our wage bill of £49.1M is not even covered by the record TV revenue received last year. As our turnover is only £79.7M, that doesn’t leave a lot to get excited about, especially if you also need to foot the bill for a new Stadium or Re-Development.
Darren Dempsey
15   Posted 01/12/2009 at 14:30:53

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Richard Dodd what part of DK is over dont you understand? You come on this sight having a pop at the supporters who were against the move! If you dont like other views apart from your own stay away,do one!
Jay Harris
16   Posted 01/12/2009 at 16:02:46

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Darren
I quite enjoy Doddy’s posts.

Reminds of reading Rasputins mad ravings before he was put to rest.
Phil Bellis
17   Posted 01/12/2009 at 17:38:06

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Jay...couldn’t agree more - man’s a legend
I rate Richard Dodd up there with the likes of David Icke
Gavin Ramejkis
18   Posted 01/12/2009 at 17:46:35

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Comical Dodd, Saddam Hussain and BK would be proud to have you as their propoganda minister.
Karl Masters
19   Posted 01/12/2009 at 21:44:19

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David Moyes said about a year ago that he preferred ’traditional football stadiums’ - a clear sign that bhe would rather stay at Goodison. This was further backed up on Friday when he said he’d love to see Goodison redeveloped.

Therefore, you would think he would view last week’s news as not so bad on the quiet.

I think, though, that most of that is secondary to him to what happens on the pitch. You don’t have to be a genius to work out why he’s been looking a bit miserable this season....just look at the results.
Karl Masters
20   Posted 01/12/2009 at 21:48:44

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Oh, and Kenwright is not the soft touch, gushing luvvie people sometimes think he is. ’Cuddly Bill’... Hmmm.

He’s an actor... always remember that...and ruthless with it. I’m really not sure he would sell the Club unless it was for silly money. I reckon he wants somebody to come in, hand over loads of cash and play second fiddle.

Remember Matthew Harding and Ken Bates At Chelsea? Harding paid for a new stand, could have elbowed Bates out with his financial muscle, but met an untimely end in a helicopter crash, never fully explained. Bates only sold out to the Buyer of a lifetime in Abramovich and is now exercising that massive ego of his at Leeds. Don’t see BK as a lot different. Just ask Paul Gregg.
Darren Dempsey
21   Posted 02/12/2009 at 14:27:37

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Jay,Phil and Gavin i see your point! It was a moment of madness on my part suggesting that the comedy genius that is Doddy do 1. His crazy talk is comical.
Richard Dodd
22   Posted 02/12/2009 at 23:07:02

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Be reasonable and see it my way,eh Darren?

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