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Tottenham Owners Planning On Selling Up?

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There’s been little to write about of any note recently, mainly because of the weather and local councils’ fear of someone suing them because they fell over on an icy pavement. First off, I know the title is a little sensationalist but if ENIC were to sell Spurs that’s exactly what it would be. It would turn our little world upside down, possibly for the good but more than likely for the bad. I should add these are entirely my views and I don’t claim to be an expert in shares and all that business stuff but it’s something to read and think about on another cold winters day while we wait for Christmas and our boxing day game to be called off.

I think Daniel Levy and ENIC have done a fine job since they bought the majority of Sir/Lord Alan Sugar’s shares a decade ago and started the process of becoming the majority shareholders in the club. It took them 7 years to finish buying all of Sugar’s shares by which time the company held 68% of the overall holding and were firmly in charge.

In the last 3 years ENIC have established themselves as owners of 86% of all shares, a combination of 76% of ordinary shares and 97% of the convertible shares they had released to help fund the initial development costs of a new stadium project.

As we all know ENIC have always backed whatever manager we’ve had in the transfer market. We’ve been one of England’s biggest spenders in the last decade. We may not have liked the way Levy went about certain things and I guess a lot of what happened in the past (Martin Jol’s treatment) could be put down to a lack of experience in the football world, but he does seem to have always had the best interest of the club at heart. However, he’s a businessman and so is Joe Lewis. In the case of Lewis, a very wealthy one.

Rumours have circulated for at least the last 5 years that ENIC would sell up soon for a tidy profit but it hasn’t materialised. The better the team got and therefore the more exposure to the world media it obtained the higher the share price rose. The one thing the club is missing is a stadium. It’s no secret Roman Abromovich “looked” at Spurs but settled on Chelsea because they were in the Champions League, were in the nicer area than north London and their stadium offered more than ours. You’ve got to wonder why Sheikh Mansour chose Manchester City out of all the clubs in the world and over a club like Spurs. Obviously we weren’t for sale but I don’t think that sort of thing stops people like that. There’s no doubt in my mind if City were still playing at Maine Road they wouldn’t be the richest club in the world at the moment.

Everyone knows to compete at the highest level you have to have that big stadium and City had theirs. Is it plausible that had we already been sitting in a nice 50,000+ stadium we might’ve been wearing keffiyeh’s? The benefit of not having to fund a new stadium is a massive plus for any potential buyer.

Which brings me on to the recent news that ENIC have bought even more shares in the club:

Tottenham Hotspur chairman Daniel Levy has tightened his grip on the Premier League club.

ENIC International – a company in which Levy is interested – now holds 181,793,258 Tottenham Hotspur ordinary shares, representing 86% of the issued ordinary share capital.

This follows the conversion of 56,247 preference shares into 87,857,814 ordinary shares.

ENIC no longer holds any interest in preference shares.

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Well to say they’ve bought more shares isn’t strictly speaking true. What they’ve done is convert the preference shares they created to get capital so they could start the beginning stages of the new stadium development. This means they still own the same percentage of shares but they’re now all ordinary shares and as I’m reliably informed this brings them to within 4% of having to make a compulsory offer for the remaining 10% of the club and therefore taking the company into the private sector. This would mean not having to answer to any shareholders and being able to do what they want.

The next conspiracy theory has to do with the timing of this announcement. With the possibility of the club moving to the new Olympic Stadium still very much on the cards, being able to move the club to the new site without the need to gain shareholder approval would be very beneficial to Levy and ENIC. As soon as we’re in the new stadium the club would also become a very sellable asset which ENIC would own 100% of. If they were to sell they’d be looking to do so before they had to start paying off the debt. That potentially could be the good news. Whichever new stadium we get, will come debt. If we’re bought by a billionaire oil tycoon who is willing to wipe that debt out of his own pocket we’d be smiling, but then there’s the other side of the coin. ENIC would make a very big profit from the sale but we could be ladened with huge debts like many other clubs who have recently been sold.

Of course none of that could happen. ENIC could stick with their 86% ownership and carry on with how they’re running things at the moment. Levy could get the NDP off the ground and in 3-4 years we could all be sitting in that big cop like stand in the new stadium. Or, we could be moved to Stratford with no say in the matter, be in a new stadium with new owners but be all over the papers because we’re in so much financial debt.

I don’t like change. Better the devil you know and all that jazz.

PS. Good to see City lose the other night. I guess that means we’re still in the title hunt? ;) COYS

Submitted by THFC1882



  1. Mark

    December 22, 2010 at 9:48 am

    This could be a distinct possibility when we have a new ground be it in N17 or Stratford. Nothing will happen before then as the new ground will bump up our value. Having a billionaire owner is not all it is cracked up to be as Man City will find out soon enough!

  2. Spuds

    December 22, 2010 at 9:49 am

    Businesses are generally bought ‘cash free debt free’. A business, for arguments sake that is worth £500m, and that had £500m of debt in it would mean the new owners would have to pay £0 for the business but would have to take on the debts. What I am saying is: if Levy sticks a whole load of debt into the club to build a stadium, ok it will make a more sellable asset, but it would not improve the profits to ENIC on the sale of THFC. i.e they have ‘x’ now, they stick in £200m debt, but that is counteracted by the asset which is also worth £200m. ENIC would still get ‘x’.

  3. leonardo

    December 22, 2010 at 10:00 am

    Spuds, you are right in what you say but businesses are not just valued on their balance sheet. They are valued mainly on future profitability (real or potential/perceived). If we borrow £200m to invest in a nerw ground it will be because the perceived value of the club (in Levy’s opinion) will increase by more than £200 million.

  4. Van Der Bale

    December 22, 2010 at 10:31 am

    The debt can come from the purchase. The new owners borrow to buy the club, then saddle it with the debt. Just because they have the money in the bank doesn’t mean they’ll use it. Isn’t that what happened to Man U?

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  6. cookiebun

    December 22, 2010 at 10:44 am

    Great article and great comments also. I suppose whoever owns the club (if bought as an asset) will always be looking at it’s saleability, so what is happening on the pitch will determine a lot of things from that stance.

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