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Club Takeover/Investment

Club Takeover/Investment

I was told a few weeks ago that a few tik tok influencers etc were interested. With the interview mentioning it with Riddler that there maybe something in that rumour.
 
The only reason that I am cautiously optimistic is that a number of people are mentioning hearing rumours, some from people on here that I trust. Not because Ridsdale says anything, as if he told me that rain is wet, I would stick check for myself!
 
jonboy said:
Agreed, but it's unusual to offer something for sale without stating the asking price. Alternatively, they could give a price ( bearing in mind they bought the club for around £150k), then add they will sell to the bidder with the best 3 year investment plan? Though I'm not sure how they can ensure such a plan is delivered? It does seem to be more complicated than it needs to be, though of course we don't know if there's any restrictions or stipulations in the Trust Conditions.
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No seller of a business attaches a price tag. A qualified bidder will sign an NDA and then receive an Information Memorandum. Based upon the IM and supplemental questions the bidder will hopefully make a non binding offer accompanied with a headline business plan. If the bid and plan are acceptable, the bidder will be given access to a data room and will be invited to conduct due diligence.
 

Since taking over Preston North End Football Club in 2010 the Hemmings family have invested and continue to invest significant sums in supporting and developing the club.

As part of the 2024/25 financial year end accounting process, a detailed review of the existing debt profile of the club has been actioned.

In order to continue to demonstrate their commitment to the long-term sustainability of the club, the owners announce the conversion of £30m worth of the existing debt/loans into equity. This is in line with similar reviews carried in 2014 and 2024.

In all cases the purpose is to greatly strengthen the balance sheet and ensure that the family can continue to invest in the club whilst keeping debt at a moderate level.

The balance of shareholder loan outstanding at the year end after converting the £30m will be £33.8m.

Craig Hemmings, Chairman said “In these uncertain times, we believe giving long-term clarity and financial stability is vital for the continued development of the Club. This most recent debt to equity swap is a further example of the family’s commitment to PNE, helping secure its sustainable future”.
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For clarity…..
A debt-for-equity swap is a financial transaction where a company that owes money cancels the debt by issuing shares in the company to the creditor, converting the creditor into an owner. This restructuring method reduces a company's liabilities and is often used when a company is in financial distress, turning an obligation to pay back loans into an agreement where the lender becomes a shareholder with potential future gains from increased company value. While it can save a struggling company by easing cash flow and avoiding insolvency, it dilutes existing shareholders' ownership and can lead to significant changes in company control.
 
OK, I admit it. I am thick.
What does this actually mean?

In order to continue to demonstrate their commitment to the long-term sustainability of the club, the owners announce the conversion of £30m worth of the existing debt/loans into equity. This is in line with similar reviews carried in 2014 and 2024.

Have they put money in, written it off, or anything else? I am from Blackpool so I need simple terms of explanation!
 
Drunks said:
OK, I admit it. I am thick.
What does this actually mean?

In order to continue to demonstrate their commitment to the long-term sustainability of the club, the owners announce the conversion of £30m worth of the existing debt/loans into equity. This is in line with similar reviews carried in 2014 and 2024.

Have they put money in, written it off, or anything else? I am from Blackpool so I need simple terms of explanation!
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They’ve written a big percentage of the debts off which will make us more attractive for a takeover.

They could have factored it into the price of any deal which obviously would have made it much harder to sell at a reasonable price.

Ties in with what @JK said about clearing the decks.
 
At the end of the day the family aren’t getting back anywhere near what they have put in no matter what numerical tricks are played.

It might mean something with regard to a sale, or it might mean nothing and just be a bit more accountancy gymnastics, a la 2014 and 24, which most of us (myself included) would not fully understand.
 
Shytot said:
What does that statement mean in real terms, is the equity what the family will expect as the price for the club?
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Put simply, they've wiped the debt.

What they've actually done is issued new shares in the company, then given those shares to the debt holder instead of paying back the debt. In our case, they already own 100% of the company, so they've effectively 'sold' shares to themselves, thereby clearing the debt. If the company was on the stock market, all existing shareholders would have seen their stake in the company devalued and the share price would drop. But as they own 100% anyway, it's just a paper exercise.
 
I believe we did this in 2014 when we were at quite an advanced stage of being sold, but it fell through. An American consortium I think we were nearly sold to.
 
simo said:
At the end of the day the family aren’t getting back anywhere near what they have put in no matter what numerical tricks are played.

It might mean something with regard to a sale, or it might mean nothing and just be a bit more accountancy gymnastics, a la 2014 and 24, which most of us (myself included) would not fully understand.
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I think cosmetically it'll make the balance sheet look nicer for a potential buyer if the assets are bigger than the liabilities (mainly the internal debt owed to the Isle of Man). Which, with this manoeuvre, they will.

Hasn't been the case since about 2018.
 
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