Everton fans fear shares will plummet in value after Friedkin takeover

Hundreds of Everton fans fear the club’s recent takeover has led to a dramatic collapse in the value of their shares, with the estate of the late chairman, Bill Kenwright, thought to be facing possible losses of as much as £5million.

There are about 1,500 supporters who own approximately 8,000 shares, which before Everton were sold by Farhad Moshiri to The Friedkin Group (TFG) in December amounted to 5 per cent of the club. As recently as November last year, shares were being traded in private sales for £3,400.

But the takeover has led to the total number of shares increasing from 135,000 to more than 1.6 million, with the supporters’ collective stake now less than 0.5 per cent and concerned fans estimating that each individual share is worth less than £175.

Ian Kilbride, who only two months ago increased his stake to 200 shares at a price of £3,400, has told The Times that he is worried his total £680,000 investment is now worth only £35,000. He has written to the club urgently seeking clarity on the situation while expressing concern that the TFG deal has led to the “destruction of minority shareholders’ rights and value”.

The Everton Shareholders Association, which includes about 300 of those 1,500 minority shareholders, is due to meet with club directors next week in the hope of finding out more about the new American owners’ intentions. In advance of the meeting they have sent a number of questions, among them whether TFG is looking to buy them out.

“These are common questions from shareholders and members of the association and we are seeking clarity from the board,” John Blain, the vice-chairman of the organisation, said.

Everton Football Club is a private limited company. According to a list published on Companies House last August, the estate of Kenwright, who died in October 2023, was the largest minority shareholder with 1,750 shares. Based on the trading price of £3,400, they would be worth just shy of £6million.

Jimmy Mulville, the actor and comedian who was a close friend of Kenwright, is listed as having 116 shares. It is unclear to whom Kenwright’s shares were left. His long-term partner, the actress Jenny Seagrove, declined to comment when approached this week but she attended the recent defeat by Aston Villa at Goodison Park.

It was reported a week before Christmas that TFG had completed a £400million takeover. At the end of November, Colin Chong, Everton’s chief executive, wrote to “valued” shareholders explaining that changes to the Premier League’s rules for Associated Party Transactions — designed to put a brake on companies associated with clubs feeding money to them — meant any shareholder loans set up by Moshiri would have to be converted to equity before January 11.

Paul Quinn, a minority shareholder with a background in financial services, published a detailed breakdown of the TFG deal for the benefit of his fellow Evertonians. There was a conversion of the outstanding BlueSky Capital (Moshiri) shareholder loans of £450.75million at £3,000 per share, with an issue of 150,250 new ordinary shares to Blue Heaven Holdings (Moshiri’s holding company for his Everton shares).

That meant the overall shareholding had expanded to 277,281 shares, equating to 97.2 per cent of the club, which was then acquired by Friedkin’s acquisition vehicle, Roundhouse Capital Holdings Limited. Everton then issued a further 1,336,537 ordinary shares, with a quoted purchase price of £174.66. This provided immediate working capital and funds to pay off long-term lenders Rights and Media Funding and 777/A-Cap loans.

TFG’s acquisition of a 99.5 per cent stake in the club was welcomed by the majority of fans. Moshiri’s loans had been wiped out and with David Moyes back as manager and a new stadium ready to move into next season, the future is looking brighter. Clearly, however, there is also a cost to those who retain the remaining 7,969 shares.

The Warrington-born Kilbride runs his business, the Spirit Organisation, from Cape Town. He bought shares because he is fanatical about Everton and wants to leave them to his sons. Last year, he also donated £2million to support Everton’s disability and literacy programmes.

Like other minority shareholders, he is demanding answers on what the takeover means for them. So far, he has been frustrated by a lack of information and detailed dialogue with the club, even if he has now been invited to a meeting with senior Everton figures early next month.

“Of course I don’t want to see the value of our investment diluted by 80 to 90 per cent,” he said. “We are in the relatively fortunate position where we can absorb it, even if it would be with difficulty.

“But there are hundreds of my fellow shareholders who will only have one or, perhaps, two shares, and cannot afford to lose their investment to this extent. Why should they have to contemplate this prospect?

“All the minority shareholders want is to be treated fairly and with respect and, as things stand, that is just not happening at the moment. I do wonder why, if TFG paid about £3,000 for some of the shares, that offer wasn’t extended to us.”

According to Forbes, the TFG chairman, Dan Friedkin, has a net worth of $7.9billion (£6.4billion). TFG is also the owner of the Italian Serie A club Roma. It is under no legal obligation to do so but buying the remaining 8,000 shares at £3,400 each would cost them £27.2million.

Blain says many members of the shareholders’ association have no desire to sell and would not welcome a blanket purchase by TFG. He also makes the point that, technically, the shares remain worth what someone is prepared to pay for them. They could still demand £3,400, although any buyer would be able to argue that, while the club’s value may have risen since the TFG takeover, it is nowhere near the £5billion valuation it would need to achieve for one of the 1.62 million shares to be worth more than £3,000.

“The majority of our members would prefer to keep their shares,” Blain said. “But one concern is whether TFG has the right to purchase all of them at the last transaction price, which would be £175. I don’t believe they would do that but we would like to understand what the situation is.”

» Read the full article at The Times

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