Alisher Usmanov and his 30% Arsenal shareholding

• It is impossible to give an exact figure because there is no
  obligation for a purchaser of shares to announce every time he buys one.
  Announcements have to be made at certain thresholds; the last one for
  Usmanov was when he reached 29% in June 2011.
  
• Tracking his purchases as far as possible since then gives him a
  figure of just over 29.9% now, leaving him perhaps 50 shares short of
  30%.
  

• There is a Premier League rule that when a shareholder in a club
  reaches a stake of 30% he is allowed full access to the club’s books.
  That means he gets all the details of who is paid what, where all the
  income comes from and where the expenditure goes.
  
• This knowledge will allow any shareholder to judge whether the
  business is being run well much better than they can by reading the
  published accounts that are available to anyone. There is a wealth of
  detail that can be hidden in ‘overall wages’ and ‘miscellaneous
  expenses’.
  
• But the Premier League didn’t put this rule in place to help minor
  shareholders like Mr Usmanov, they put it in place so that if ownership
  of a club was split between several parties, those with relatively big
  holdings could not duck out of the responsibilities of ownership, they
  would be forced to take an interest.
  
• What the PL didn’t envisage was the situation at Arsenal, where
  there is a majority shareholder (over 50%) plus another shareholder at
  30% who is not welcome on the Board.
  
• So Usmanov wants to get to 30% to allow him full access to the accounts.
  
• Stan Kroenke may or may not care whether Usmanov reaches 30%; he
  doesn’t care enough to buy up remaining small shareholdings in order to
  stop Usmanov getting them.
  
• However, Kroenke still may resist opening the books on the basis
  that the rule was implemented to stop people avoiding liability, and Mr
  Kroenke is very happy to take full liability at Arsenal, thank you very
  much.
  

• Short answer: nothing – anymore. Not at Arsenal, anyway. When there
  are a bunch of small shareholders and no single person has majority
  control, 30% is the magic figure at which a shareholder has to make a
  bid for all other shares in a company.
  
• Again this is designed to stop shareholders avoiding responsibility.
  It stops them building a big stake in a company without taking on any
  of the duties of ownership.
  
• You will recall that Kroenke bought enough shares to take him to
  just below the 30% threshold, then stuck on that level until it suited
  him and the rest of the Board to make his move. At that point he agreed a
  price with Danny Fiszman and the other Board members, and was obliged
  to make an offer for all the other shares.
  
• But now that that there is a majority shareholder, there is no rule
  that says Usmanov getting to 30% obliges him to do anything. He does not
  have to make an offer to Kroenke if and when he reaches 30%, and this
  is not his reason for wanting to get there.
  
• Some people mistakenly think that 30% entitles Usmanov to a seat on
  the Board. It doesn’t. The Board is voted for by the shareholders and
  votes require a majority, 50% plus one share. As Kroenke has about 67%
  his vote wins. Usmanov is not joining the Board.
  

• The most important is 50%, because most votes in limited companies
  in the UK require a simple majority. As stated, Kroenke owns about 67%,
  so no one can outvote him on anything to do with the day to day running
  of the club. He can appoint the Board, sack people and interfere in
  Arsène’s team talks if he likes.
  
• When the other shares are split into smaller blocks and you have a
  few mates on the Board with you, it is possible to maintain day to day
  control of a company with a stake of around 30% – as Danny Fiszman was
  doing – but you need 50% to be absolutely sure you don’t need to answer
  to the riff raff.
  
• 75% is also important, as you need support from holders of 75% of shares to make some changes to the company constitution.
  
• This is why Usmanov’s initial push was to get to 25% before Kroenke
  launched his full bid. Although Usmanov knew he could not easily get a
  majority (with Kroenke already cosied up to Danny Fiszman), with 25% he
  could block anyone restructuring the company and trying to keep him out
  for good.
  
• The last important number is 90%. If a single shareholder reaches
  90% then he can, if he desires, force the remaining shareholders to sell
  up and then take the company private. Kroenke had no chance of reaching
  90% as long as Usmanov opposed his takeover, so the remaining small
  shareholders can be grateful to Usmanov for that.
  
• We may never know whether Kroenke would have taken Arsenal private,
  but as supporter feelings do not appear to be high on his list of
  priorities it’s a possibility. It appears that he views supporters as a
  necessary evil and small shareholders as an unnecessary irritant. I
  would love to be proved wrong.
  
• If Kroenke does decide to sell to Usmanov at some point, Usmanov will immediately have over 90%. We’ll then find out his real attitude to supporters and small shareholders very quickly.
  

• Depends on your outlook. If you have no interest in how your
  football club is run and think that is for other people to deal with
  (even though it affects every aspect of what happens on the pitch), then
  no, it doesn’t matter.
  
• But public companies have to publish accounts and have a certain
  level of openness, which I prefer to believe is important when the
  company is a football club that people invest in emotionally as well as
  financially.
  
• Ask yourself this: Do you prefer to have a club where supporters can
  scrutinise to a large extent how it is run, or do you prefer everything
  behind closed doors and the Board not answerable to anyone but
  themselves?
  

• Anytime he wants to. Tomorrow, next year, never.
  

• Probably because there is no indication that Kroenke wants to sell.
  
• When he made a counter offer right after Kroenke had made his, Usmanov specifically said he would buy anyone’s shares except
  Kroenke’s; that was to stop Kroenke immediately making a quick few
  million by buying shares from others at one price and then selling
  straight on to Usmanov.
  
• Usmanov now gives the impression that he would quite happily buy all
  Kroenke’s shares, but probably not for the same amount he is paying for
  the few odd shares he is still picking up from small shareholders.
  
• The scarcity of shares in the market and Usmanov’s determination to
  reach 30% means that the price he’s paying has pushed up from under £14k
  to £16k a share. If you took this as a true reflection of value and
  extrapolated it to apply to all Arsenal shares, then the club is
  suddenly worth over £1bn, compared to the £760m that Kroenke’s offer
  valued it at. Clearly this is a hypothetical figure, at a time when the
  on-field performance is flagging.
  
• An unfortunate consequence of Usmanov’s push for 30% is the shortage of shares for the Arsenal Fanshare scheme, in which supporters club together to buy shares and maintain an independent stake in the club for the benefit of all.
  

Iceman wrote:Kroenke >>> Usmanov