RIP sale thread.

[Unbelievable]

quayside, serious question: who determines the flotation value of PLC shares?

[Guest dover]

I was just looking at Sports Direct's share price thinking that if I had shares in Ashley's other business I'd want to get rid based on the woeful way he's run NUFC, and was surprised to see that it's doing rather well. Sports Direct's share price has doubled since Christmas '08, they're increasing market share, and some analysts are recommending investors to add Sports Direct to their portfolio. He's obviously employed some shrewd and experienced businessmen to run that company for him so why can't he run NUFC using the same principle of employing the best people available who know the football industry?

 

Llambias has obviously been way out of his depth as Chairman, so if I were Ashley I'd bring back Chris Mort and allow him to employ an experienced team of directors to maximise the potential of NUFC. Obviously this would mean that Ashley would have to invest more money into the club, and I appreciate that we don't know if this is possible due to his own personal finances, but surely, as a gambling man, this must be more preferable to him than just walking away and taking the £150 million hit.

 

 

 

Ashley has still fleeced investors in Sports Direct though. He floated it at £3 a share (but kept about 55% of the shares iirc) and trousered £929 million in cash based on that valuation. Following the flotation at its worst it went down to about 40p a share and that was before there was a recession. The dive in price was due to poor performance and the company not delivering what it had said it would. It is also generally regarded as being one of the worst run PLCs on the market. The price has recently recovered, as you say, and is about 85p now, but thats still well short of the flotation value. When the price dived Ashley started buying up the shares again taking advantage of the lower price - last time I looked his holding was back up to about 75% of the company.   

 

 

Says it all then doesnt it? he price has only recovered because hes bought most of them back, hes underwritten the debt effectively. Which underlines the fact that his company is run equally as shite as NUFC.

[Guest Phil K]

Sorry but you cannot blame Shepherd for that one, he was in hospital with a punctured lung (or something like that) while Sir John Hall sold out to Ashley forcing Shepherd to either launch a takeover bid from his hospital bed or sell up.

Absolutely correct.

Sir John had high expectations of Ashley after Fat Freddie had made such a mess

I doubt he beleived that Ashley would employ such morons to run the club though.

[NG32]

I was just looking at Sports Direct's share price thinking that if I had shares in Ashley's other business I'd want to get rid based on the woeful way he's run NUFC, and was surprised to see that it's doing rather well. Sports Direct's share price has doubled since Christmas '08, they're increasing market share, and some analysts are recommending investors to add Sports Direct to their portfolio. He's obviously employed some shrewd and experienced businessmen to run that company for him so why can't he run NUFC using the same principle of employing the best people available who know the football industry?

 

Llambias has obviously been way out of his depth as Chairman, so if I were Ashley I'd bring back Chris Mort and allow him to employ an experienced team of directors to maximise the potential of NUFC. Obviously this would mean that Ashley would have to invest more money into the club, and I appreciate that we don't know if this is possible due to his own personal finances, but surely, as a gambling man, this must be more preferable to him than just walking away and taking the £150 million hit.

 

 

 

Ashley has still fleeced investors in Sports Direct though. He floated it at £3 a share (but kept about 55% of the shares iirc) and trousered £929 million in cash based on that valuation. Following the flotation at its worst it went down to about 40p a share and that was before there was a recession. The dive in price was due to poor performance and the company not delivering what it had said it would. It is also generally regarded as being one of the worst run PLCs on the market. The price has recently recovered, as you say, and is about 85p now, but thats still well short of the flotation value. When the price dived Ashley started buying up the shares again taking advantage of the lower price - last time I looked his holding was back up to about 75% of the company.   

 

 

Says it all then doesnt it? he price has only recovered because hes bought most of them back, hes underwritten the debt effectively. Which underlines the fact that his company is run equally as s**** as NUFC.

 

Who the fck are his advisors ??

[Slugsy]

If he is willing to write off the debt (which I don't believe he will) and assuming the debt is circa £100m, then he effectively is giving away the club for free.

 

Wonderful if that is the case but my main concern in all of this is that Ashley sells to the RIGHT buyer and not just the first tom dick or harry that pitches up with the cash.  Shepherd didn't seem that concerned about Ashley's intentions when he sold and look where we have got to.  If Ashley really wants to right the wrongs, he must think about the buyer, their resources, intentions going forward etc as we could easily end up with another Shepherd/Ashley and be back to square one or worse in 12 months time.

 

 

 

 

you'll have to explain that one again to me ?

 

Loose wording, apologies.

 

Effectively, if he writes off the debt for the purposes of sale then he will have to pay it himself and thus the £100m he receives from a buyer will pay that off and he will be left with zero, thus he gets nothing.

 

Overall, it will have cost him £130m (before any other injections) - the original cost of the investment.

 

I don't think that is what he intends to do, I think he intends to leave the debt in the business and thus the overall cost to a buyer would be £200m (£100m to Ashley, £100m to re-finance the debt). 

 

Ashley in turn would receive £100m for what he paid £130m for (before any other injections), thus a £30m loss.

[ikri]

If he is willing to write off the debt (which I don't believe he will) and assuming the debt is circa £100m, then he effectively is giving away the club for free.

 

Wonderful if that is the case but my main concern in all of this is that Ashley sells to the RIGHT buyer and not just the first tom dick or harry that pitches up with the cash.  Shepherd didn't seem that concerned about Ashley's intentions when he sold and look where we have got to.  If Ashley really wants to right the wrongs, he must think about the buyer, their resources, intentions going forward etc as we could easily end up with another Shepherd/Ashley and be back to square one or worse in 12 months time.

 

 

 

 

you'll have to explain that one again to me ?

 

Loose wording, apologies.

 

Effectively, if he writes off the debt for the purposes of sale then he will have to pay it himself and thus the £100m he receives from a buyer will pay that off and he will be left with zero, thus he gets nothing.

 

Overall, it will have cost him £130m (before any other injections) - the original cost of the investment.

 

I don't think that is what he intends to do, I think he intends to leave the debt in the business and thus the overall cost to a buyer would be £200m (£100m to Ashley, £100m to re-finance the debt). 

 

Ashley in turn would receive £100m for what he paid £130m for (before any other injections), thus a £30m loss.

 

The debt is owed to Ashley though, if it were owed to a 3rd party then your assessment would be correct but if he's willing to write off the debt owed to him then it doesn't require any re-financing.

 

Ashley takes £100m for the club and writes off the £100m owed to him by the club.  He takes a huge loss on the loans he's made to the club and the £34m extra that it cost him to buy the club, but he won't have to pay anything out of his pocket to sell the club, it's all money that's already been spent and now lost.

[AfroP]

I dont understand how somebody that has succesfully managed to run our club into the ground and prep us as the next leeds is still considered a succesful business man and a "tycoon"

I also dont get how he has managed to build up his business like he has.

[Dave]

http://www.chroniclelive.co.uk/nufc/newcastle-united-news/2009/06/01/mike-ashley-puts-newcastle-united-up-for-sale-again-72703-23760895/

MIDDLE East millions could be used to buy Newcastle United.

 

Owner Mike Ashley revealed his desire to sell the club over the weekend, admitting he’s prepared to offload it for a cut-price £100m.

 

And the Chronicle understands one of two groups interested is an Omani consortium while the other is based in the UK.

 

The Omani group is believed to have proved the extent of their wealth to those charged with selling United and plan to invest hundreds of millions of pounds into the crisis-hit Championship club.

[Karjala]

http://www.chroniclelive.co.uk/nufc/newcastle-united-news/2009/06/01/mike-ashley-puts-newcastle-united-up-for-sale-again-72703-23760895/

MIDDLE East millions could be used to buy Newcastle United.

 

Owner Mike Ashley revealed his desire to sell the club over the weekend, admitting hes prepared to offload it for a cut-price £100m.

 

And the Chronicle understands one of two groups interested is an Omani consortium while the other is based in the UK.

 

The Omani group is believed to have proved the extent of their wealth to those charged with selling United and plan to invest hundreds of millions of pounds into the crisis-hit Championship club.

yeah, i wish...

[Slugsy]

If he is willing to write off the debt (which I don't believe he will) and assuming the debt is circa £100m, then he effectively is giving away the club for free.

 

Wonderful if that is the case but my main concern in all of this is that Ashley sells to the RIGHT buyer and not just the first tom dick or harry that pitches up with the cash.  Shepherd didn't seem that concerned about Ashley's intentions when he sold and look where we have got to.  If Ashley really wants to right the wrongs, he must think about the buyer, their resources, intentions going forward etc as we could easily end up with another Shepherd/Ashley and be back to square one or worse in 12 months time.

 

 

 

 

you'll have to explain that one again to me ?

 

Loose wording, apologies.

 

Effectively, if he writes off the debt for the purposes of sale then he will have to pay it himself and thus the £100m he receives from a buyer will pay that off and he will be left with zero, thus he gets nothing.

 

Overall, it will have cost him £130m (before any other injections) - the original cost of the investment.

 

I don't think that is what he intends to do, I think he intends to leave the debt in the business and thus the overall cost to a buyer would be £200m (£100m to Ashley, £100m to re-finance the debt). 

 

Ashley in turn would receive £100m for what he paid £130m for (before any other injections), thus a £30m loss.

 

The debt is owed to Ashley though, if it were owed to a 3rd party then your assessment would be correct but if he's willing to write off the debt owed to him then it doesn't require any re-financing.

 

Ashley takes £100m for the club and writes off the £100m owed to him by the club.  He takes a huge loss on the loans he's made to the club and the £34m extra that it cost him to buy the club, but he won't have to pay anything out of his pocket to sell the club, it's all money that's already been spent and now lost.

 

I wasn't aware that Ashley had actually re-paid the debt, I thought he had re-financed it in the holding company.  If he had paid the debt off already (which I can't understand why he would of) then he will pocket the notional £100m but the actual overall cost will be the same as a stated (pre £34m extra).  The numbers would be a overall cost of £260m less £100m received = £130m loss, include the £34m and its £164m loss.

 

I haven't looked at the accounts so not aware in detail of the structure of the financing.

[Pilko]

http://www.chroniclelive.co.uk/nufc/newcastle-united-news/2009/06/01/mike-ashley-puts-newcastle-united-up-for-sale-again-72703-23760895/

MIDDLE East millions could be used to buy Newcastle United.

 

Owner Mike Ashley revealed his desire to sell the club over the weekend, admitting hes prepared to offload it for a cut-price £100m.

 

And the Chronicle understands one of two groups interested is an Omani consortium while the other is based in the UK.

 

The Omani group is believed to have proved the extent of their wealth to those charged with selling United and plan to invest hundreds of millions of pounds into the crisis-hit Championship club.

 

I'm sure the Chronicle have a "consortium/billionare" generator that they pull everytime there's takeover talk from other sources. To flog more papers.

[quayside]

quayside, serious question: who determines the flotation value of PLC shares?

 

The company has advisors (a merchant bank, stockbroker) who would put a value on it based both on its historical performance and more importantly on its projected performance. The projections are then examined by an independent firm of accountants and tested for reasonableness. It is then "floated". The company's merchant bank would underwrite the floatation .i.e. buy any excess shares not bought by the public or other institutions. The valuation was not Ashley's although he would have had a target in mind and prepared projections accordingly.

 

The company has substantially underperformed since floating. There has also been a lot of criticism of the communication by Sports Direct and its PR generally is pretty awful (Ashley called his shareholders "whingers" in an interview not so long ago). Ashley has also taken flak for appointing people who are mates of his and not considered to be up to the job. In some ways thats fair enough because the City's assessment of being up to a job isn't always fair or based on detailed knowledge, but when results are disappointing its hard to defend. I only mention all this because there is a bit of a familiar pattern in some of it. 

[Nobody]

http://www.chroniclelive.co.uk/nufc/newcastle-united-news/2009/06/01/mike-ashley-puts-newcastle-united-up-for-sale-again-72703-23760895/

MIDDLE East millions could be used to buy Newcastle United.

 

Owner Mike Ashley revealed his desire to sell the club over the weekend, admitting he’s prepared to offload it for a cut-price £100m.

 

And the Chronicle understands one of two groups interested is an Omani consortium while the other is based in the UK.

 

The Omani group is believed to have proved the extent of their wealth to those charged with selling United and plan to invest hundreds of millions of pounds into the crisis-hit Championship club.

Please be true.

[TRon]

quayside, serious question: who determines the flotation value of PLC shares?

 

The company has advisors (a merchant bank, stockbroker) who would put a value on it based both on its historical performance and more importantly on its projected performance. The projections are then examined by an independent firm of accountants and tested for reasonableness. It is then "floated". The company's merchant bank would underwrite the floatation .i.e. buy any excess shares not bought by the public or other institutions. The valuation was not Ashley's although he would have had a target in mind and prepared projections accordingly.

 

The company has substantially underperformed since floating. There has also been a lot of criticism of the communication by Sports Direct and its PR generally is pretty awful (Ashley called his shareholders "whingers" in an interview not so long ago). Ashley has also taken flak for appointing people who are mates of his and not considered to be up to the job. In some ways thats fair enough because the City's assessment of being up to a job isn't always fair or based on detailed knowledge, but when results are disappointing its hard to defend. I only mention all this because there is a bit of a familiar pattern in some of it.  

 

I wonder how many of these "advisors" have a decent knowledge of football? Historical performance and projected performance depends as much on how wisely the money is spent on players, and that's something that can't be forecast looking at a spreadsheet.

[quayside]

quayside, serious question: who determines the flotation value of PLC shares?

 

The company has advisors (a merchant bank, stockbroker) who would put a value on it based both on its historical performance and more importantly on its projected performance. The projections are then examined by an independent firm of accountants and tested for reasonableness. It is then "floated". The company's merchant bank would underwrite the floatation .i.e. buy any excess shares not bought by the public or other institutions. The valuation was not Ashley's although he would have had a target in mind and prepared projections accordingly.

 

The company has substantially underperformed since floating. There has also been a lot of criticism of the communication by Sports Direct and its PR generally is pretty awful (Ashley called his shareholders "whingers" in an interview not so long ago). Ashley has also taken flak for appointing people who are mates of his and not considered to be up to the job. In some ways thats fair enough because the City's assessment of being up to a job isn't always fair or based on detailed knowledge, but when results are disappointing its hard to defend. I only mention all this because there is a bit of a familiar pattern in some of it.  

 

I wonder how many of these "advisors" have a decent knowledge of football? Historical performance and projected performance depends as much on how wisely the money is spent on players, and that's something that can't be forecast looking at a spreadsheet.

 

Wires crossed there Tron - I was talking about the flotation value of Sports Direct.

[Guest Magpiecn]

http://www.chroniclelive.co.uk/nufc/newcastle-united-news/2009/06/01/mike-ashley-puts-newcastle-united-up-for-sale-again-72703-23760895/

MIDDLE East millions could be used to buy Newcastle United.

 

Owner Mike Ashley revealed his desire to sell the club over the weekend, admitting he’s prepared to offload it for a cut-price £100m.

 

And the Chronicle understands one of two groups interested is an Omani consortium while the other is based in the UK.

 

The Omani group is believed to have proved the extent of their wealth to those charged with selling United and plan to invest hundreds of millions of pounds into the crisis-hit Championship club.

I wont give hope on it.I'm afraid I'll be disappointed again.

[TRon]

quayside, serious question: who determines the flotation value of PLC shares?

 

The company has advisors (a merchant bank, stockbroker) who would put a value on it based both on its historical performance and more importantly on its projected performance. The projections are then examined by an independent firm of accountants and tested for reasonableness. It is then "floated". The company's merchant bank would underwrite the floatation .i.e. buy any excess shares not bought by the public or other institutions. The valuation was not Ashley's although he would have had a target in mind and prepared projections accordingly.

 

The company has substantially underperformed since floating. There has also been a lot of criticism of the communication by Sports Direct and its PR generally is pretty awful (Ashley called his shareholders "whingers" in an interview not so long ago). Ashley has also taken flak for appointing people who are mates of his and not considered to be up to the job. In some ways thats fair enough because the City's assessment of being up to a job isn't always fair or based on detailed knowledge, but when results are disappointing its hard to defend. I only mention all this because there is a bit of a familiar pattern in some of it.  

 

I wonder how many of these "advisors" have a decent knowledge of football? Historical performance and projected performance depends as much on how wisely the money is spent on players, and that's something that can't be forecast looking at a spreadsheet.

 

Wires crossed there Tron - I was talking about the flotation value of Sports Direct.

 

My bad. Haven't read back through most of the thread so jumped in a bit too hastily.

[mouldy_uk]

http://www.chroniclelive.co.uk/nufc/newcastle-united-news/2009/06/01/mike-ashley-puts-newcastle-united-up-for-sale-again-72703-23760895/

MIDDLE East millions could be used to buy Newcastle United.

 

Owner Mike Ashley revealed his desire to sell the club over the weekend, admitting he’s prepared to offload it for a cut-price £100m.

 

And the Chronicle understands one of two groups interested is an Omani consortium while the other is based in the UK.

 

The Omani group is believed to have proved the extent of their wealth to those charged with selling United and plan to invest hundreds of millions of pounds into the crisis-hit Championship club.

 

I'm surprised they haven't quoted the £100m the manager will get to spend on players in the summer (like they always do) 

[Unbelievable]

quayside, serious question: who determines the flotation value of PLC shares?

 

The company has advisors (a merchant bank, stockbroker) who would put a value on it based both on its historical performance and more importantly on its projected performance. The projections are then examined by an independent firm of accountants and tested for reasonableness. It is then "floated". The company's merchant bank would underwrite the floatation .i.e. buy any excess shares not bought by the public or other institutions. The valuation was not Ashley's although he would have had a target in mind and prepared projections accordingly.

 

The company has substantially underperformed since floating. There has also been a lot of criticism of the communication by Sports Direct and its PR generally is pretty awful (Ashley called his shareholders "whingers" in an interview not so long ago). Ashley has also taken flak for appointing people who are mates of his and not considered to be up to the job. In some ways thats fair enough because the City's assessment of being up to a job isn't always fair or based on detailed knowledge, but when results are disappointing its hard to defend. I only mention all this because there is a bit of a familiar pattern in some of it.  

 

Thanks quayside.. Seems like Ashley is only marginally to blame in this one. It's happened before and it will happen again: some stocks will take off after flotation, and some will plummet. It's always a gamble, and if there is any blame to be attributed it seems the "professional" corporate bankers play a big a role as any party in setting the price and convincing investors that the price is a fair assessment.

 

You are right regarding his subsequent behaviour, it is quite clear that the man is not a very corporate figure, rather he is a self made man who doesn't understand the complexity of running a large corporation in the public eye, or indeed a football club. I respect what he has achieved building up his empire (entrepreneur myself, although on a completely different level unfortunately), but it's hard to see how he can go much further if he doesn't possess the required intelligence himself and/or puts his trust in people who he likes on a personal level but keep letting him down business-wise..

[jimmymag]

There still seems to be some debate over whether Ashley is going to write off the £100 the club owes him.  The club can only be worth between £80m to £100m and that's what he is asking for it, so it seems obvious to me that he must be writing off the debt.

 

Unless he's hoping to get a buyer as naive as himself who wouldn't bother to carry out due diligence and get caught with the debt exactly as he did. 

[Broadsword]

There still seems to be some debate over whether Ashley is going to write off the £100 the club owes him.  The club can only be worth between £80m to £100m and that's what he is asking for it, so it seems obvious to me that he must be writing off the debt.

 

Unless he's hoping to get a buyer as naive as himself who wouldn't bother to carry out due diligence and get caught with the debt exactly as he did. 

 

 

 

 

Nobody will buy the club with his £100m still in it.  That's the reason why clubs like Chelsea and retailers like zavvi get bought for £1, the debts outwieght the value of the club.

 

Do you think Ambramovic will keep his debt to Chelsea when he leaves?  Can you imagine Chelsea being £400m in debt to Ambramovic and still finding a buyer to pay what he wants for the club? i.e £250m for the club and then £400m to abramovic?

 

He will have to write it off because nobody will pay £100 for us with debts at that level.  Either he writes it off or gives the club away.

[Newcastle Fan]

Just get it over with.

[afar]

There still seems to be some debate over whether Ashley is going to write off the £100 the club owes him.  The club can only be worth between £80m to £100m and that's what he is asking for it, so it seems obvious to me that he must be writing off the debt.

 

Unless he's hoping to get a buyer as naive as himself who wouldn't bother to carry out due diligence and get caught with the debt exactly as he did. 

 

Nobody in their right mind would pay 100 million for a championship club with 100 million in debted to the previous owner. He basically has to absorb that "loan" he made to the club and take the 150 million loss he's made in his two year association with NUFC.

 

What's telling in that phrase which is quoted for the Times interview is that he says he's lost his money, he clearly is writing it off, even he's not stupid enough to think he'll get a buyer for the club without doing so.

[NG32]

There still seems to be some debate over whether Ashley is going to write off the £100 the club owes him.  The club can only be worth between £80m to £100m and that's what he is asking for it, so it seems obvious to me that he must be writing off the debt.

 

Unless he's hoping to get a buyer as naive as himself who wouldn't bother to carry out due diligence and get caught with the debt exactly as he did. 

 

Nobody in their right mind would pay 100 million for a championship club with 100 million in debted to the previous owner. He basically has to absorb that "loan" he made to the club and take the 150 million loss he's made in his two year association with NUFC.

 

What's telling in that phrase which is quoted for the Times interview is that he says he's lost his money, he clearly is writing it off, even he's not stupid enough to think he'll get a buyer for the club without doing so.

 

This is what happens when a cockney makes the decision in the pub over a warm shandy. 

[Guest Mucky01]

There still seems to be some debate over whether Ashley is going to write off the £100 the club owes him.  The club can only be worth between £80m to £100m and that's what he is asking for it, so it seems obvious to me that he must be writing off the debt.

 

Unless he's hoping to get a buyer as naive as himself who wouldn't bother to carry out due diligence and get caught with the debt exactly as he did. 

 

Nobody in their right mind would pay 100 million for a championship club with 100 million in debted to the previous owner. He basically has to absorb that "loan" he made to the club and take the 150 million loss he's made in his two year association with NUFC.

 

What's telling in that phrase which is quoted for the Times interview is that he says he's lost his money, he clearly is writing it off, even he's not stupid enough to think he'll get a buyer for the club without doing so.

 

surely it isn’t just the sale value of the club and the debt to Ashley a new buyer would have to consider, it’s also the company's liabilities and assets? The key thing that we all know about is the huge financial ‘albatross’ of the players contracts that need to be honoured. As we all know that this is for huge amounts of money for very little assets — those players themselves can’t be disposed of without writing off huge sums of money. Although the assets of the players are considered they’re surely not in relation to their true worth, as most aren’t worth anything like what was paid for them, or for what they are being paid.

 

I would guess you would have to write off at least another £50m to clear out the dross.

 

Hence time for Ashley to cut his losses and do a runner.