Dens shares talks at impasse

Negotiations between Dundee and the Dundee FC Supporters’ Society (DFCSS) over the potential purchase of shares have reached an impasse, writes Neil Robertson.

Earlier this month, the club wrote to the society in a bid to push the shareholding held by Football Partners Scotland (FPS) to over 75%.

However, the society responded with suggestions of their own that were rejected by the club, with the two parties miles apart on the valuation of the shares involved. Now, DFCSS have sent another letter to their members explaining what has occurred.

Despite the inability to negotiate an agreement with the club, the society were keen to emphasise that they continue to have a strong desire to have a constructive relationship with FPS, and that their entrenched rights should not be an impediment to the new stadium plans.

On March 14 society director Bob Hynd wrote to Dundee finance director David Gray with suggestions that included:

The society will draft a shareholders’ agreement, based on the entrenched rights.

The society felt the sale of the shares must be for a “significant” sum of money. The suggested figure is £105,000. This is based on 75% of the nominal share value.

The society would add £25,000 towards this sum to reinvest £130,000 back into the club.

The society would request the return of an annual question and answer session with the owners of the club.

A day later, Gray responded with points that included:

In our letter of March 5 2019, we were clear that a shareholder agreement would not be discussed as part of these proposals. This remains our position.

The sum of £8,000 is the amount FPS are willing to pay for a straight purchase of the shares. FPS are, however, willing to make a final offer of £10,000 for the shares even although this sum would exceed the estimated costs of a full share issue.

We are not willing to commit to any structured question and answer sessions at this stage.

Please note that we have now started the preparations for a general share issue. We would therefore appreciate a response to this email by Monday March 18 2019.

Now, the society’s secretary, Ian Baird, has replied to Gray in a letter that included the following:

It is with great disappointment that the board acknowledges FPS’ rejection of its constructive proposals and also confirm that for the time being the society will retain its funds in its existing bank account and reconsider how best to manage its assets in the future.

The strong feeling of the board and the majority of the members who have commented on FPS’s proposals is that the offer of £8,000 (increased to £10,000) does not remotely recognise the supporters’ past input and has understandably been described by a significant number as “derisory”.

On the subject of the proposed ‘shareholder agreement’ the board appreciates that the DFC/FPS letter of the March 5 2019 effectively ended discussions, however the board understood that this situation may have subsequently changed and as a consequence incorporated a positive offer in the March 14 2019 proposals.

Clearly the situation has not changed.

In acknowledging the refusal of FPS to enter into a shareholder agreement at this stage, the board respectfully requests that FPS abide by the terms of the club’s ‘articles of association’ to which they have previously agreed, especially the rights pertaining to the ‘A Ordinary’ shares that they accepted during their 2013 takeover of the club.

With reference to ‘Proposal 2’ in the DFC/FPS letter dated March 5 2019 the board can now confirm that there is virtually no detectable desire on the part of its members to support the awarding of shares on a pre-emptive basis.

Consequently, the board would not wish to commit to approving a process that appears to command negligible support.

Finally, the board wishes to reaffirm its support in principal for the proposed new stadium development at Camperdown and once more confirm its views that the society’s entrenched shareholder rights should not be an impediment to the club’s new stadium plans.