What’s at stake for Supporters’Trust as American owners make new proposal?
THIS week saw a significant development in the long-running saga that has raised emotions and tensions behind the scenes at Swansea City.
A year on from the takeover share sale that angered the club’s Supporters Trust, the fan body have now presented details of a proposition that could bring an end to the infighting that at times threatened to tear the Swans apart off the field.
It would see the Trust sell up to half of their existing stake in the club to the US businessmen who purchased a 68% majority shareholding last summer.
It could eventually hand over around £11m to the supporters’ group, while also retaining their vote and voice on the board.
But it would also end any legal claim they have in reference to the takeover last year which they have long held issues over – as well as seeing their current 21.1% stake in the club drop to around 10.5%
The Trust will open up the decision on the potential sale to its membership following a consultation forum held at the Liberty on Thursday – but has recommended that fans accept the deal.
Here, Chief Football Writer CHRIS WATHAN, tries to explain the background to the developments, why the Trust are keen for the deal, and what it could mean to Swansea City. HOW DID WE GET TO THIS STAGE? The Supporters Trust wasted little time in outlining their concerns after it was revealed a ‘takeover’ deal had been all but agreed in April last year and have consistently claimed they had been unfairly kept out of the loop.
It meant that other shareholders – including chairman Huw Jenkins – were able to sell all or part of their shares in the deal with American pair Steve Kaplan and Jason Levien without the Trust being part of the negotiations should they have wanted to also sell.
The Trust also voiced concerns of the ownership structure, wanting greater assurances over their position in terms of influence and protection in the new set-up.
It led to initial tensions, something not helped by an admitted lack of communication and consultation regarding key on-the-field decisions as Swansea struggled under Francesco Guidolin and Bob Bradley.
Discussions over a way forward began – with Kaplan and Levien acknowledging supporters’ ‘legitimate dissatisfaction related to events leading up to us taking a majority stake in the club’ – and saw the Trust involved in the subsequent replacement of Bradley with Paul Clement, as well as being kept abreast of transfer plans.
However, both parties agreed to shelve talks over ownership until after Swansea successfully avoided relegation – with the results of those talks presented to fans on Thursday. WHAT IS ON THE TABLE? In a nutshell, an offer from the Americans to immediately buy shares from the Trust and the potential for more to follow.
The shares will be valued at the same price as in the initial takeover and would see the Trust’s stake go down to around 16%.
There would also be a commitment from Kaplan and Levien to buy a further slice of the Trust’s stake – 0.5% of the total – every year for the next five years, also at the same price but dependent on the club being in the Premier League.
Finally, there would be a ‘call’ option where there is an option – but not an obligation – for the US pair to purchase a further lump of the Trust’s shares (3%) by January 2020. If all that happens, it would see the Trust receive around £11m for 10.5% of the club’s shares they currently own.
The Trust would also retain it’s voting director’s seat on the board – currently held by Stuart McDonald – as well as the additional associate director presence in the boardroom that was established last season, with Will Morris able to observe and support McDonald, although he is not able to vote. WHAT’S IN THE SMALL PRINT? The Trust revealed, as part of the deal, they would also be asked to consider reinvesting 20% of the money received for the shares back into the club in the event of possible future stadium expansion. They did admit that details over this have not been fleshed out at this stage and would not be a guaranteed commitment.
The Trust also confirmed that Jenkins would be involved in purchasing some of the shares, as well as Kaplan and Levien, as part of the deal – something they anticipate criticism over given the strength of feeling regarding last summer’s sale.
There would also be ‘tag-along’ and ‘drag-along’ clauses inserted into the deal, while accepting the proposal would end any legal claims of the Trust regarding last summer’s deal. WHAT ARE ‘TAG-ALONG’ AND ‘DRAG-ALONG’ RIGHTS? Tag-along rights are when that, if the club is sold in the future, the value of the Trust’s remaining shares has to be valued the same as the shares of all other shareholders. It means they could not be excluded from future share sales – and essentially makes sure that the scenario of last summer could not be repeated, as well as protecting the financial value of the shares.
Drag-along, however, means that the Trust could be forced into selling their shares in a future deal with little power to stop it happening. In other words, the Trust could not block a total sale if it formed part of an offer from a third party (though they could have only 10% at this stage and would be unable to prevent others selling their stakes). WHY DO THE TRUST WANT TO SELL SOME OF THEIR SHARES? The Trust have always said they would be open to selling shares and have made it clear to Kaplan and Levien they would consider offers.
The Trust have in the past made offers to take their holding up to 25%, a position where they would have