Following the Club’s statement yesterday, the Trust has spoken with the Club to clarify the position and is pleased to provide members with the following update.
This is clearly a significant moment for the Club. Although Delia and Michael have an existing lock-step agreement with Norfolk, which was due to continue until January 2026, their recent dealing with Norfolk has brought them both to the decision that now is the right time to step aside, thereby accelerating majority ownership to Norfolk.
This proposal remains subject to approval from both the Takeover Panel, for a Rule 9 waiver, and shareholder approval for the waiver option, at a forthcoming General Meeting, which should be before the next AGM in November.
The outline of the deal will see Norfolk’s existing loan agreements, of £59m, converted into equity, through the issue of two new forms of preference shares; D-preference and E-preference shares.
The D-preference shares will hold an option to convert into 2,465,165 new ordinary shares from March 2025, thereby immediately increasing Norfolk’s holding to 85% of the enlarged equity.
Delia and Michael will retain all their existing shares, but their shareholding will be diluted to 10% of the increased shareholding. They will step down as directors of the Club and take up positions as Honorary Life Presidents.
The new E-preference shares will not contain any conversion rights, or redemption rights, effectively meaning that this element of the debt will no longer be due for repayment at any point in the future.
Richard Ressler will immediately be appointed as a director of the Club. He has already passed the EFL’s Owners’ And Directors’ Test, (OADT), given his pre-existing part ownership in Norfolk.
There is also no need for further EFL approval, given Norfolk’s existing interests in the Club.
The four-fold increase in new Ordinary shares will result in a corresponding dilution of their shareholding. However, this proposal, if approved, will result in £59m debt liabilities being removed from the Club’s balance sheet. It will also enhance cashflow, by removing an ongoing interest liability accruing from the existing loan agreements with Norfolk.
The Club is currently working with the Takeover Panel to finalise the Rule 9 waiver circular, which should, hopefully, be sent to all shareholders over the coming weeks, with a General Meeting thereafter, hopefully in September.
Full details of the proposal will be forthcoming within the circular to be issued to shareholders, in due course. However, based on the Club’s statement, together with our discussions with the Club, this seems a positive proposal, which should be fully endorsed and approved by shareholders in due course.
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