BREAKING NEWS – Stan Kroenke Ups Arsenal Stake To 28.3%

Official announcements were made to the PLUS market towards the close of business today (Friday 1 May 2009) that Stan Kroenke has acquired a further 4,839 Arsenal Holdings shares to take his total stake in the club’s holding company to 17,613 shares, or 28.3% of the total 62,217 issued.  
The shares have been bought from the “Carr family” including long-standing director Richard Carr, a member of the Bracewell-Smith family which has been represented on the Arsenal board for three generations. Richard Carr was recently demoted from the board of the holding company to the board of the football club, a wholly owned subsidiary. The assumption is that the remaining shares were purchased from Lady Sarah Phipps-Bagge, another Bracewell-Smith family member.  
It is difficult at this stage to know exactly where this continuing saga will end. What we do know for certain is that Stan Kroenke and Danny Fiszman now own 44.4% of the club’s shares between them, adding Fiszman’s remaining 16.1% stake (10,025 shares) to Silent Stan’s enhanced holding. This effectively gives them control of the club and the board of directors. All the other directors have either very small or no shareholding.  
The remaining large shareholders are Alisher Usmanov’s Red & White Holdings on 15,555 shares (25%) and Lady Nina Bracewell-Smith (who is a family member by marriage, ownership of her Arsenal Holdings shares having been transferred to her from her ailing husband) on 9,893 (15.9%). These holdings amount to 85.3%, the remainder are in the hands of smaller shareholders such as the Arsenal Supporters’ Trust.  
When considering any publicly quoted business (or some of the bigger private businesses for that matter) it’s important to distinguish ownership from control. Whilst the Kroenke/Fiszman shareholding works together it effectively controls the club, despite falling short of an absolute majority of the shares.  
My working assumption is that Kroenke has bought the Carr shares on credit, as he did with the Fiszman shares he bought a while back. At the prices quoted he will have agreed to pay something north of £90 million for his enhanced stake from Fiszman and the Carrs.  
Seasoned observers I’ve spoken to see no reason why Kroenke would take his holding over 30%. This would trigger an automatic mandatory bid for the remaining 55.6% of the shares in issue. The price he’d have to offer would be £10,500 a share or more than £362 million. Why would he do that? He has control already. He’s already lashed out or committed himself to around £165 million, including the Arsenal Holdings shares he bought from ITV plc along with its 50% stake in Arsenal Broadband Ltd, the shares he picked up on the PLUS market, and his purchases from Fiszman and the Carr family.  
The big “loser” in all this is Lady Nina. She’s got her nose pressed against the glass looking in. The huge holding she controls doesn’t even get her a cup of tea and a smile anymore. Likewise, Alisher Usmanov is a loser. He had had his trousers well and truly pulled down by the recession, the collapse of the Rouble and weak demand and huge debt in his main businesses of mining and steel, two areas you do NOT want to be in a recession.   
There is I suppose the possibility that Red & White Holdings could “go nuclear” and make a claim to the City Takeover Panel that Danny Fiszman and Stan Kroenke are a “concert party”, that is working together and that their holding should be considered together. This could force Kroenke and Fiszman into making a mandatory bid. I doubt they will do this however. Usmanov has his own blues with his businesses in Russia. I shouldn’t think he wants to fight a two-front war at the moment.  
That’s it for now. Nice timing chaps. Not.  Just before our single biggest game since the 2006 Champions League Final. Thanks for that. Couldn’t you at least have waited until after Tuesday? Better still until the end of the season? We DON’T need the distraction at the moment. And, NO, you can’t have my share – at any price.   
Yet another good reason why EVERY Gooner should be a member of the Arsenal Supporters’ Trust:
More on this in my usual Monday blog.  
Keep the faith!  

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