FPP to take full control

[Kittenmittons]

A lot of this all makes sense now though, the wiping of the debt and the impact on the asking price is clear, as is the way FPP structured the deal, the amount of money put in, and the likely valuation.

I reckon the valuation is in the region of £18m, as the £9.1-9.3m that FPP put in would equate to 51% of that. That's my rough feeling, but I've seen a deal recently where it was more 60/40 on similar terms so essentially it's unlikely to be more than that and it shows that (again, positive!) they would be inclined to potentially be majority owners as early as the Championship.

 

[Guinness Guzzler]

Something else that now makes sense and is positive too: The convertible loan would likely (with the debt wiped off) give FPP a majority stake in the club at the price today.

One thing I don't get (because I'm **** at financial stuff) : FPP loaned money to Madrox, not Sunderland, so if it was converted into shares it would be converted into Madrox shares, but I thought that Madrox shares were worth **** all, hence Sartori spending a quid! How would they work out what percentage of Madrox they'd get for the money? Apologies if this is a daft question!

 

[Comfy]

Sunderland AFC News And Banter Page
3 hrs ·
️ A key update from @Phil__Smith on American investors FPP Sunderland and their interest in [HASHTAG]#SAFC[/HASHTAG]

https://t.co/QqVcERUgEm


https://t.co/dYsOlnp8v5

You must log in or register to see images

Like
Comment
Share

this reminds me of when a manager gets the boards backing then 2 weeks later he’s sacked.

 

[wearside wanderer II]

I don't really understand your point here.

This was clearly their choice as to how to do structure a deal that they were happy with. Donald probably would have loved it if they'd have offered to do the whole lot up front, but they clearly didn't, so how can it ever have been 'a takeover' if they opted against ever making an offer for the majority of shares?

Donald and DJ told every man dog and horse that it was a takeover.
He didn’t even know if they wanted him to stay on and run the club
Till something happened
Then it was a loan, not a investment, just a loan, a loan which they shouldn’t have needed.

 

[Smug in Boots]

Donald and DJ told every man dog and horse that it was a takeover.
He didn’t even know if they wanted him to stay on and run the club
Till something happened
Then it was a loan, not a investment, just a loan, a loan which they shouldn’t have needed.

Exactly.

In fact it was a loan that Donald said they didn't need .... WTF?

 

[Guinness Guzzler]

Donald and DJ told every man dog and horse that it was a takeover.
He didn’t even know if they wanted him to stay on and run the club
Till something happened
Then it was a loan, not a investment, just a loan, a loan which they shouldn’t have needed.

This. It was a takeover. A takeover that was very near to going through. Plenty of people have said that Methven was mentioning it, the fanzines were all running with it (having been tipped off). Something then changed, given what's been in the press recently its a fairly easy guess to suggest they might have been looking to buy the Sunderland companies through FPP Sunderland, then realised there was a £20m hole and pulled out. Maybe they were told by a broker that SAFC were available for about £40m, they looked at the books and thought "with that £20m due its only £20m which is worth it" only to find there was no intention to deduct the £20m.

They offered a loan heavily weighted in their favour as they still wanted the club if they could get us into a good position, Donald said yes because he was taking absolute pelters for them walking away and was desperate (hence comments saying we didn't really need the loan). Now the loan is in play they could just as easily buy Madrox (especially if there isn't a requirement to pay £20m from there to SAFC) and don't need FPP Sunderland any more, which gets dissolved

 

[Kittenmittons]

One thing I don't get (because I'm **** at financial stuff) : FPP loaned money to Madrox, not Sunderland, so if it was converted into shares it would be converted into Madrox shares, but I thought that Madrox shares were worth **** all, hence Sartori spending a quid! How would they work out what percentage of Madrox they'd get for the money? Apologies if this is a daft question!

The Madrox shares are semi-irrelevant, in that they just correspond with SAFC's shares too as that's all they own. If you own and control Madrox, you own and control SAFC by default!

So basically I think the $12m is roughly somewhere around 51% of the control in Madrox/SAFC, ie: majority stake territory. It may even be more than 51% and the value could be even lower!

 

[wearside wanderer II]

That loan now, from FPP may well be the saving grace for the club seen as the three amigos don’t want to rub the genies lamp

 

[Smug in Boots]

This. It was a takeover. A takeover that was very near to going through. Plenty of people have said that Methven was mentioning it, the fanzines were all running with it (having been tipped off). Something then changed, given what's been in the press recently its a fairly easy guess to suggest they might have been looking to buy the Sunderland companies through FPP Sunderland, then realised there was a £20m hole and pulled out. Maybe they were told by a broker that SAFC were available for about £40m, they looked at the books and thought "with that £20m due its only £20m which is worth it" only to find there was no intention to deduct the £20m.

They offered a loan heavily weighted in their favour as they still wanted the club if they could get us into a good position, Donald said yes because he was taking absolute pelters for them walking away and was desperate (hence comments saying we didn't really need the loan). Now the loan is in play they could just as easily buy Madrox (especially if there isn't a requirement to pay £20m from there to SAFC) and don't need FPP Sunderland any more, which gets dissolved

"And this is Jack Ross, the manager ...

... Jack, meet the new owners."

"Oops, did I saw new owners ...

... what I meant is that it's just a loan"

 

[Montysoptician]

This. It was a takeover. A takeover that was very near to going through. Plenty of people have said that Methven was mentioning it, the fanzines were all running with it (having been tipped off). Something then changed, given what's been in the press recently its a fairly easy guess to suggest they might have been looking to buy the Sunderland companies through FPP Sunderland, then realised there was a £20m hole and pulled out. Maybe they were told by a broker that SAFC were available for about £40m, they looked at the books and thought "with that £20m due its only £20m which is worth it" only to find there was no intention to deduct the £20m.

They offered a loan heavily weighted in their favour as they still wanted the club if they could get us into a good position, Donald said yes because he was taking absolute pelters for them walking away and was desperate (hence comments saying we didn't really need the loan). Now the loan is in play they could just as easily buy Madrox (especially if there isn't a requirement to pay £20m from there to SAFC) and don't need FPP Sunderland any more, which gets dissolved

I try not to speculate but if I was a betting man that's what my money would be on

 

[Guinness Guzzler]

The Madrox shares are semi-irrelevant, in that they just correspond with SAFC's shares too as that's all they own. If you own and control Madrox, you own and control SAFC by default!

So basically I think the $12m is roughly somewhere around 51% of the control in Madrox/SAFC, ie: majority stake territory. It may even be more than 51% and the value could be even lower!

Cheers. And presumably that ties in with them being able to become majority owners if the club doesn't improve its position, but if Donald can get us promoted (I know) and we improve then the fair value of the shares would be greater, so FPP could take a minority stake, continue to fund and take more and more shares as we go, meaning Donald makes a lot if he does well and a lot less if he doesn't.

And I know you don't think it likely, but I maintain that if Donald wants out he could sell Madrox to someone else who is happy to accept that arrangement and FPP could stay involved

 

[Lozza80]

A lot of this all makes sense now though, the wiping of the debt and the impact on the asking price is clear, as is the way FPP structured the deal, the amount of money put in, and the likely valuation.

I reckon the valuation is in the region of £18m, as the £9.1-9.3m that FPP put in would equate to 51% of that. That's my rough feeling, but I've seen a deal recently where it was more 60/40 on similar terms so essentially it's unlikely to be more than that and it shows that (again, positive!) they would be inclined to potentially be majority owners as early as the Championship.

Is it possible that let's sd was telling the truth about fpp requesting the debt to be wrote off
Could they then not say to sd how about you dont repay the parachute money back into the club , keep the 9mil we paid you and that's the deal done instead of fpp paying extra for the club? And sd drip feeding money back in?

 

[Kittenmittons]

This. It was a takeover. A takeover that was very near to going through. Plenty of people have said that Methven was mentioning it, the fanzines were all running with it (having been tipped off). Something then changed, given what's been in the press recently its a fairly easy guess to suggest they might have been looking to buy the Sunderland companies through FPP Sunderland, then realised there was a £20m hole and pulled out. Maybe they were told by a broker that SAFC were available for about £40m, they looked at the books and thought "with that £20m due its only £20m which is worth it" only to find there was no intention to deduct the £20m.

They offered a loan heavily weighted in their favour as they still wanted the club if they could get us into a good position, Donald said yes because he was taking absolute pelters for them walking away and was desperate (hence comments saying we didn't really need the loan). Now the loan is in play they could just as easily buy Madrox (especially if there isn't a requirement to pay £20m from there to SAFC) and don't need FPP Sunderland any more, which gets dissolved

Again, this all resides on one fundamental fact that I can't get on board with, and that's the idea that FPP came back to the table and did a deal with a desperate man, rather than simply letting him dwell on it, handle the fallout, and then accept their initial offer.

And again, why not spin that positively if you're him? That would genuinely be some achievement, but instead he's explicitly said they didn't do that.

Seems odd to me.

 

[Kittenmittons]

Is it possible that let's sd was telling the truth about fpp requesting the debt to be wrote off
Could they then not say to sd how about you dont repay the parachute money back into the club , keep the 9mil we paid you and that's the deal done instead of fpp paying extra for the club? And sd drip feeding money back in?

That's possible. But in that case, they'd own us now. They could have written the debt off at any time, these are just the public accounts.

 

[Guinness Guzzler]

Again, this all resides on one fundamental fact that I can't get on board with, and that's the idea that FPP came back to the table and did a deal with a desperate man, rather than simply letting him dwell on it, handle the fallout, and then accept their initial offer.

And again, why not spin that positively if you're him? That would genuinely be some achievement, but instead he's explicitly said they didn't do that.

Seems odd to me.

It wasn't really a deal as such, it was a very heavily weighted loan. It gives them everything they want and gives Donald very little. I think it's fair to say Donald wouldn't have accepted it under Bothal circumstances, but the backlash when it became obvious FPP had walked away was unreal, he had nowhere to turn

 

[Kittenmittons]

It wasn't really a deal as such, it was a very heavily weighted loan. It gives them everything they want and gives Donald very little. I think it's fair to say Donald wouldn't have accepted it under Bothal circumstances, but the backlash when it became obvious FPP had walked away was unreal, he had nowhere to turn

But again, they got a great deal. They arguably got a better deal than buying us outright, and at what looks like a decent price even at a worst case of <£20m if we're in the championship, but getting to walk away before that if we never make it without a loss.

I'm struggling to think of negotiations that could go better for someone than Donald coming back to the table and offering them what appears to be a lower price than people think he was asking for, plus an amazing get out of jail free card

I just can't see it mate. It makes far more sense that they offered that and his first choice was to get them to buy it all off him up front, walk off into the sunset or as I alluded to yesterday, maybe stay on for a while and help out.

 

[Lozza80]

That's possible. But in that case, they'd own us now. They could have written the debt off at any time, these are just the public accounts.

Could it not be that they are just haggling over a little bit extra £££ to seal the deal ?

 

[Kittenmittons]

Could it not be that they are just haggling over a little bit extra £££ to seal the deal ?

Doesn't sound like it, but the best case scenario is that they are.

But my feeling has been and remains that it's 99% about being further up the league ladder before they commit. It just all makes so much sense that way, because price is relatively black and white and they would need to agree it as part of the convertible option.

 

[Lozza80]

Doesn't sound like it, but the best case scenario is that they are.

But my feeling has been and remains that it's 99% about being further up the league ladder before they commit. It just all makes so much sense that way, because price is relatively black and white and they would need to agree it as part of the convertible option.

If you want the club though, how long do you rely on sd to get us there ? And financially things could of got a whole lot worse for him, he also Is desperate to get out
I'm just looking at the other side of the coin here

 

[Iansun]

If you want the club though, how long do you rely on sd to get us there ? And financially things could of got a whole lot worse for him, he also Is desperate to get out
I'm just looking at the other side of the coin here

Is he desperate to get out