Morgan revs up for action at Liverpool

[Guest]

He's a **** and if he gets hold of the club in any meaningful way, we're up **** creek.

No, we would be hamstrung.

[animal magic]

He's a **** and if he gets hold of the club in any meaningful way, we're up **** creek.

why what don't you like about him

[lfc4ever]

Interesting take on Morgan here:

Posted by Rushian on May 12, 2004, 04:54:26 PM

http://www.redandwhitekop.com/article.php?id=459955

Steve Morgan held a press conference this morning outlining his proposal to inject £73m of new capital into Liverpool Football Club. We have produced another rough guide to what's going on. It's in two parts: the first covers the press conference and the second covers the nitty gritty of the facts and figures and we show how Steve Morgan could easily end up as the largest shareholder, or even more than 50% of the club.

The Press Conference

He confirmed that he had written to the LFC Board of Directors on Tuesday with full details of his proposal, which remains open for 7 days. He has asked the Board to provide a formal written response within that timescale.

The proposal includes a rights issue of new ordinary shares, open to all shareholders, which will generate approximately £61million of new money, together with a new share issue directed at the supporters of the club which could generate a further £12million. Both would be underwritten by Steve Morgan's company Bridgemere Investments Limited. The offer is a counterbid to the Thai talks and proposals.

He emphasised that these proposals would keep the ownership of the club where it belonged, with the supporters of the club, emphasising his lifelong support for the Reds. The funds would be used to subtantially strengthen the playing squad and partially fund the proposed new stadium.

He proposes to do this in three steps.

1) Firstly by having a 10 for 1 share split in advance of the rights issue, which would result in a revised number of shares in issue of just under 350,000 (there's 35,000 at present). He stated the share split is "designed to enable all shareholders of whatever means to participate, in some way in, the rights issue. The share split will also increase the liquidity of the shares in the club, which in the long run will assist those supporters wishing to become shareholders."

2) A 1 for 1 rights issue ranking equal to the existing shares at £175 per share which will generate just under £61m. This offer would be open to all shareholders.

3) A further 10% of totally new shares to be issued at £175 per share, with the intention that these would be sold directly to the supporters of the club. This would raise a further £12m.

These three steps would raise a total of £73m and both the rights issue and share issue would be underwritten in full by Bridgemere on a nil fee basis (the fee would normally be around £1.5m if the finance was coming from the City).

The two conditions attached to the proposal are that Steve Morgan is appointed to the board following the rights issue and that Brigemere has additional board representation proportional to the outcome of the rights issue. It is not a condition of the offer for the Chairmanship of the club to change, David Moores being able to participate in the rights issue and remain the largest single shareholder.

Morgan stated his proposal would allow the commercial rights to the Asian market to remain with the club, allowing LFC alone to benefit from these rights. He also believed the proposal would allow fans for the first time to participate in the fortunes of the club, the scarcity and price of shares having prevented this previously. He also emphasised "I have only one goal in all of this and that is to help Liverpool become the number one team in both England and Europe."

Two issues which have been of great concern to many fans have been Mr Morgan's views on a ground share with Everton, and taking LIverpool onto the stock market in a similar way to Manchester United's listing. Transcribed below are his answers at the press conference to both these questions:

What Morgan said about groundshare:

Reporter: There's some speculation that you'd be interested in groundshare proposals with Everton.

Morgan: Like any true Liverpool supporter, I would always always prefer us to have our own ground. And that would be the premise of it to start with. The only thing I have said and I've been misquoted on this, I'm glad for the opportunity to state the issue, is that if the offer is accepted, if I am on the board and if I have my ... I clearly would have my say, I think you have to always look at all options, but clearly and unequivocably my preferred option is definitely for Liverpool Football Club to have its own ground.

On the issue of the club becoming listed on the stockmarket:

Reporter: You've got about 5% of the club at the moment, if this is accepted can you say what proportion do you think you'd control and also what is the difference is between a rights issue and a share issue?

Morgan: Right I'll answer the second part of your question first. A rights issue is to existing shareholders, so all the existing shareholders will have a right to subscribe for new shares. Which is why we've offered to do the share split to make the shares more affordable cause otherwise if they didn't split them they'd be £1750 per share so at least somebody who has got one share for example at the moment, would have ten under this new structure and they may want to subscribe for two or three or four of those ten. So that's a rights issue. A share issue is brand new shares. But I've got to stress that this, we do not ... I have no desire, and it's been reported several times in the past that I want to take Liverpool Football Club public. That is not the case. Liverpool Football Club are already a public company and have been for many many years. All I want to do is make the shares available to a wider fanbase so that ownership is spread amongst the lads, like myself, who go to watch Liverpool every week.

Facts and Figures

Steve Morgan is effectively valuing the currently issued shares at £1750 each, before the injection of extra capital through a rights and shares issue takes them to £2875. They've been exchanging hands at £4000-4500 via the stockbrokers Blankstone Sington in the last year. Morgan's proposal then has a three stage plan (all figures are approximates):

1) a 10 for 1 split of existing issued shares. Currently there are 35000 shares. This would become 350,000 shares with each shareholder getting 10 of the new shares for each one currently held. All shareholders would retain the % they currently have. The three largest shareholders would be:

Moores 178500 (51%)
Granada 34650 (9.9%)
Morgan 17850 (5.1%)

2) Next would follow a 1 to 1 rights issue. This would introduce another 350,000 shares, priced at £175 each raising £61m, which each shareholder invited to apply on a pro-rata basis according to their current shareholdeing. David Moores would be able to buy 51% of these shares if he so wished. Morgan has proposed to underwrite the whole issue and will take up the "slack" if any shareholder chose not to invest.

To maintain his current 51% holding David Moores would have to invest £31.1m . He can chose to invest anything up to this amount. Any rights not taken up by Moores will be bought by Morgan. Looking at the two extremes of no investment and full investment by Moores, the Morgan v Moores picture would look like:

Moores invests fully:

Moores 357000 shares (51%) at a cost to him of £31.2m.

Morgan would have a minimum of 35700 shares (5.1%) at a cost of £3.1m, rising to a maximum of 189350 shares (27.05%) at a cost to him of £30m. This maximum figure depends on the take up of the rights issue by shareholders other than Moores and Morgan himself.

Moores doesn't invest at all:

Moores 178500 shares (25.5%).

Morgan would have a minimum of 214200 shares (30.6%) at a cost of £34.4m, rising to a maximum of 367850 shares (52.5%) at a cost of £61.3m. This maximum figure again depends on the take up by shareholders other than Moores and Morgan himself.

3) An issue of 10% new shares would then follow, directed at the fans. These 70,000 shares, priced at £175 each would raise £12m, and would take the total number of shares to 770,000. We're assuming current shareholders would be ineligible for this and David Moores would not be allowed to invest in the scheme. Again Steve Morgan will underwrite this issue and buy any shares not taken up.

Of this final total of 770,000 shares:

David Moores would have 178,500 (23.2%) if he hadn't invested in the rights issue. If he had invested fully he'd hold 357000 (46.4%) and would thus lose overall control whatever the share buying pattern under Morgan's proposals.

Steve Morgan could now hold anything from 17850 shares (4.6%) to a maximum of 437840 shares (56.9%, costing him £73m), again depending on the take up of the rights issue and the share issue.

What would David Moores need to invest to guarantee he'd remain the largest shareholder?

He'd have to own 308200 shares (40.0 %). Steve Morgan could then have a theoretical maximum of 308140 shares (39.9%). This would entail an investment by our present chairman David Moores of £22.7m in 129700 shares.

The Reality?

If Steve Morgan's proposal was accepted, we'd expect David Moores to invest in shares to try and retain his largest % shareholding position. The question is how much would he need to invest? It is hard to predict the uptake in the rights issue to existing shareholders however Granada are unlikely to invest any more money in the club, so Steve Morgan would mop up their shares in the 1 for 1 offer.

We believe the £12m share issue to fans would be extremely well supported and Steve Morgan may not need to underwrite this. So David Moores may be able to stay as the largest shareholder by investing around £15-20m, but correctly predicting that figure is like picking the winner of the National. You get it right more by luck than judgement!

So that's the bare bones of the case - we haven't touched on whether the two men could successfully work together in the board room or press speculation of the manager's future. We believe both lie outside the scope of an impartial analysis of the current proposal.

If you have any questions you can email us at:

[email protected]

Independent Liverpool Supporters Association

http://www.ilsa.org.uk/

[Hamstrung]

No, we would be hamstrung.

Indeed we would

why what don't you like about him

I think he's essentially a publicity whore. He doesn't have the money for a start - his last offer was derisory and he used it to make misleading statements about the clubs debts when discussing due dilligence.

His exploits (and those of his wife) at recent AGM's suggest a Ridsdale-esque character in it for the publicity and what he can get out at the other end. He's also made seemingly intentionally vague comments re: groundshare.

From what I have seen of him, I think he'd be trigger happy if/when appointing a new manager, I think he'd be interfering, and I think he'd make decisions based on finance rather than the best interest of the club

Had he been in charge when Houllier went, I don't think we'd have got Rafa as I think he'd veto suggestions from a CEO where it revealed his ignorance.

Finally, Redrow houses are on a par with Barratts, Wimpey et al. Would you want those ***** building your Stadium? How long a snag list will that be?

Obviously, it looks like we need investment due to the stadium, but I really think we'll only realise how lucky we are when Parry/Moores are no longer at the helm.

As Joni said, "Don't it always seem to go, that you don't know what you've got 'til its gone"

[CharlieMansonsSquint]

He's got nowhere near the cash the club needs. Quite simply: he's not rich enough. It would be a major disapointment if he was the investor IMHO.

Isn't he in favour of Groundsharing?, or that he was before that idea was shot dead in the water. That always put me off him.

[Mumsafan]

I don't want Morgan and that's it. Never have. Never will. He hasn't got the money and he's a ****in nob!

[Shaggy]

He was yeah.

[Bob]

He's got nowhere near the cash the club needs. Quite simply: he's not rich enough. It would be a major disapointment if he was the investor IMHO.

My sentiments exactly!

[PLY]

I don't want Morgan and that's it. Never have. Never will. He hasn't got the money and he's a ****in nob!

Succint and too ****ing true

[cobain]

Just thought I'd share it with you guys...

CLICK CLICK CLICK!

[lfc4ever]

Did the board meeting go ahead on Friday gone?

Anyone hear anything from it at all?

[Kangakop]

well if he is serious about buying into liverpool it would be easier than trying to get shares off moores

This is actually a very interesting insight into what his intentions are - and no doubt reflects how limited his funds are...

Remember when the club needs more money (and a substantial amount as we do), it is a fact that the existing shares are of far less importance than the new shares to be issued. The negotiations I expect have all been about the issue price of new shares - as that effectively places a value on the existing shares (which is of course of vital interest to Moores; Granada and Morgan as the largest existing shareholders - and definitely in that order of importance!).

No one is really interested in buying the existing shares (from Granada or Moores) - as they know that the number of new shares to be issued and their price will effectively dilute and revalue the existing shares. You are better to keep your gunpowder dry - for that bidding war.

If Morgan was simply interested in building his stake in the club - then the Granada shares should be the cheapest way to go. As a willing seller in a company with (extremely) limited marketability, Granada would probably accept any practical offer he made. Their only other hope is to wait for someone to eventually make a takeover offer and hope that it is higher... though in the current circumstances, a takeover is not a foregone conclusion.

However that still only takes him to 15% making him the second-largest shareholder behind Moores - for the moment... and while he could almost certainly get a Board seat - Moores still has absolute control... and they could both be tipped out (or marginalised) by an incoming new investor with deeper pockets.

In any event, that money goes into Granada's pockets and does the club no good at all.

When the club does raise money from investor(s) - (hopefully very soon?) - then Morgan - if offered the chance (by no means certain) - would have to contribute substantially more just to maintain his position - and the main incoming investor would in any event likely leapfrog both him and Moores as the largest shareholder pushing him down to third place.

Unfortunately, unless Morgan committed a really substantial part of his wealth, he can't buy a controlling stake in an LFC that has raised the sort of sum needed to fund a stadium - unless it's all done at a knock-down (distressed) price.

The club obviously needs £50-100m to fund the equity side of the stadium. [Remember that Morgan's 2004 proposal saw the club raise £73m in new funds - less his underwriting fee.]

So to buy 51% of the current club capital and then maintain it by subscribing for 51% of the sum raised - he would need to invest around £100m - which seems too big a stretch for him. Unless he was willing to swap all his other business interests for running LFC (which might scare a few LFC fans and key staff...).


He is simply waiting... waiting ... for the Board to fail to come up with the money - and then will offer to inject the new funding (again) at a cheap price.

We must now be getting very close to that showdown once again. Part of the rich tapestry of Life at LFC...



[My own personal view (and I certainly don't have a crystal ball), I'd expect the rumoured Dubai consortium to outbid him - and he may then have quite a few years to wait for another chance, if it ever comes again. If so, then he will have done the club a huge service in being the underbidder and keeping the successful bidder honest.

If that happens, then hindsight will say that Morgan made a poor judgement call when instead of reaching an agreement with Moores several years ago he chose to attack him personally at every public opportunity. By working with Parry & Moores, he may have got what he wanted at only a slightly higher cost than he unsuccessfully offered.]

[puredale]

Quality post - very intersting.

The lack of a clear strategy from either the club or Morgan is encouraging for potential new bidders - and confusing for us fans!

[BobTheCharmer]

well if he is serious about buying into liverpool it would be easier than trying to get shares off moores

are we forgetting that he is the 3rd largest shareholder already? Its not like a stranger trying to buy into the club.

[Sir Bob]

The level of abuse Morgan receives in such debates always amazes me. He's a local lad, with millions to invest and yet he's almost universally shot down.

Like all of us on here, I don't know Morgan. I don't know if he'd be a good board member or not. I don't know if he'd make a good chairman or not. Most people dislike him because his wife has mouthed off at a couple of AGM's.

To those who say no to Morgan, who do you want to invest in LFC. would you want Glazier or Roman on board. I wouldn't. Many wanted the Thai pm who's just been toppled, despite his appalling human rights record. I hear lots of calls for Robert Kraft but what do we know of him. Not a lot.

I'm not saying Morgan is 100% my man because I'm not in a position to judge. Moores doesn't like him, thats obvious, but at least Morgan's passionate about the club,which is a start. Moores has made been a decent chairman but he has also presided over our worst spell since the 1960's. I'm not saying thats all his fault but as head honcho he takes his share of the blame.

Moores & Morgan are both passionate about LFC & have much to offer. They may differ on many things but both want the best for LFC. They do not see LFC first & foremost as a cash machine to generate wealth for them. They have their differences but if LFC is to prosper long term financially then it would appear to me at least that the ideal solution would be for Moores to invite Morgan & his cash on board. Moores must put his personal dislike of Morgan to one side and do whats best for LFC.