Date: 11th April 2011 at 9:14am
Written by:

The news that Stan Kroenke was planning to takeover Arsenal Football Club broke yesterday after the Blackpool game but was heralded by vaguer rumours earlier in the week. Now it has been formally confirmed on the clubs website following an announcement to the markets this morning.

The offer commits to continuing to operate in line with the existing self sustaining policy and states that the offer will not be funded by debt finance secured against the Club. Kroenke has also said he has asked the current board of directors Peter Hill-Wood, Ivan Gazidis, Ken Friar, Sir Chips Keswick and Philip Harris to remain in place.

The price offered is £11,750 per share for which he already has agreed options to purchase Danny Fiszmans`s 10,448 (16.11%) and also has irrevocable undertakings from Lady Nina and the other Arsenal directors holding shares, other than Fiszman and himself, to accept the offer. The options on Fiszman’s shares are to be exercised no later than 20 business days after Fiszman’s death which, with it’s tragic undertones, seems to be a mechanism to allow KSE the cash position to fund any shares that he is forced to buy under mandatory takeover rules. The current undertakings gives him an interest in 62.89% of the total issued share capital of the club and therefore he already assumes effective control of the club.

Kroenke has issued the following statement “We are excited about the opportunity to increase our involvement with and commitment to Arsenal. Arsenal is a fantastic Club with a special history and tradition and a wonderful manager in Arsène Wenger. We intend to build on this rich heritage and take the Club to new success. I am delighted that Peter Hill-Wood has agreed to support us by continuing as Chairman. We especially wish to acknowledge and thank the Board, Danny Fiszman and the Fiszman family as well as Lady Nina Bracewell-Smith and her family for the confidence they have had in me over the past years and in allowing us to move forward in this more prominent role.”

Peter Hill-Wood in paying tribute to Danny Fiszman`s involvement with the club and that of the Bracewell-Smith family said “Mr Kroenke, although relatively new to Arsenal, has shown himself to be a man who values and respects the history and traditions of this very special Club that we cherish. We are confident that he will be a safe custodian of its future.”

Arsene has also apparently endorsed the takeover saying that “I have worked with Stan Kroenke at board meetings over the past couple of years and I believe he has the best interests of Arsenal at heart. He understands the Club’s heritage and traditions and our ambition to run the Club in a way which protects our long term future.”

With Stan Kroenke set to own at least 62.89% it is not known how many other shareholders will take up this offer. Usmanov’s Red & White Holdings owns a little over 27% which would seem to leave less than 10% with small shareholders. If Usmanov were to take up the offer it would give Kroenke Sports Enterprises more than 90% which under stock market rules could allow them to compulsorily purchase the remaining shares though his endorsement of the Arsenal fanshare scheme would suggest this is unlikely but the offer document acknowledges the possibility in given circumstances.

So is it a good thing for the club or not? There was a problem of succession with Danny Fiszman`s shares which given the 66 year olds poor health would have needed to have been resolved sooner rather than later and Lady Nina’s shares have been on the market for some time. This at least adds certainty to those open issues and prevents the less popular Usmanov from extending his influence over the club. Whether Usmanov now sells out could be significant as currently his blocking stake provides some sort of protection against increasing debts if that were his inclination.

There is some comfort in that this isn`t a cold takeover. Kroenke has been involved with the club as a shareholder since 2007, was appointed to the board in September 2008 and actively running it with the support of Fiszman for sometime so he knows how the business has been run and has helped to shape it. Ivan Gazidis was his appointment and it is he who will give a video interview on the takeover to be posted on the club website soon.

Join The Vital Debate