Peek behind the '£20 million!' headlines and life gets very complicated, very quickly.
Mon 30 Jun 08
News that billionaire insurance tycoon Peter Cullum was prepared to pump £20 million into Norwich City Football Club in return for a controlling interest in the Championship outfit this morning merely prompted more questions than answers - and left the existing City board walking the tightest of PR tight-ropes.
To dismiss out of hand a man ranked 40th equal in the Sunday Times Rich List with a personal fortune estimated at £1.7 billion - give or take - would be to court widespread supporter fury. Particularly when, from the outside, the 57-year-old one-time Norwich City Boys footballer looks to tick every box in terms of Delia Smith's cherished, 'fit and proper Norfolk person' test.
However, Cullum's stated desire to become the majority shareholder - "I'm not prepared to put that sort of money into the club without having control," he told the Eastern Daily Press this morning - unlocks an almighty can of worms.
Because under the strict City takeover rules that govern such matters, Cullum can not simply write a cheque out for the 61.2% majority shareholding currently owned by Delia Smith and her husband Michael Wynn Jones and assume command at Carrow Road.
Once someone bids for over 30% of the shareholding in a Plc, they are obliged under City Code Rule 9 to buy the whole company - and make every other shareholder in that business an offer.
It is an issue that lies at the very heart of the failed Carson Yeung takeover bid of Birmingham City last season with the Hong Kong businessman initially taking out a 29.9% stake in the St Andrews club for a £15 million 'down-payment' with a view to then buying out the remaining shareholders as and when the finance was put in place.
When it transpired that the second round of buy-out funding was not to be from Yeung himself, but a company listed on the Hong Kong stock exchange the deal began to swiftly unravel - leaving Blues co-owner David Sullivan to stage a 29.9% raid of his own.
"Over the next few months it is my intention to show my commitment to the club by increasing my shareholding to 29.9 per cent - the maximum allowed by the stock market without making a full bid for the club," Sullivan told the Press last year.
His subsequent words may ring a little hollow following Birmingham's return to the Championship, but they do provide a telling insight into just how messy and damaging the whole takeover business can become.
It was the uncertainty surrounding Yeung's on-off takeover that prompted Steve Bruce's exit - he kept Wigan up, as Alex McLeish took Blues down.
"My enthusiasm for the club is renewed," said Sullivan, speaking last December. "The appointment of our new manager [Alex McLeish] has been a success, and I have not felt this inspired and happy at the club for a very long time. The board and I have drawn a line under the Carson Yeung/Grandtop saga and, as we promised, we remain in place to ensure the club continues to go from strength to strength."
Seven months on and Yeung remains the largest single shareholder in the club. Sat there; casting a long shadow over St Andrews as the stale-mate and stand-offs continue. Not to mention the poisonous accusations being thrown Sullivan's way from thousands of fed-up Blues supporters. Part 2 >>
