After much speculation throughout the summer of further Board changes, and perhaps a right issue in the offering, Everton released the news this morning that Farhad Moshiri had increased his shareholding from 49.9% to 68.6% of Everton Football Club. In doing so he becomes the clear majority owner of the club.

As per the statement, in acquiring his additional 6,546 shares, Moshiri exercised the options agreed at the time of his purchase. He has acquired all of Jon Woods’ shares (3,116) Arthur Abercrombie’s (circa 900) and Bill Kenwright’s (circa 2,530). This would leave Bill Kenwright with a balance of approximately 5% of the remaining shares.

There will be speculation of course as to why the transaction was executed now. It may be because this was always the original intended timing or that Moshiri has brought forward the acquisition in the light of stadium financing requirements.

There can be no doubt that Moshiri becoming the majority shareholder now removes some uncertainties for potential lenders as to the future ownership and control of the club. Whilst previously he had effective control, now he has complete control over future financing, the composition of the board and the direction and strategy of the club in the future.

Perfect opportunity to articulate the future of the club, in particular Bramley Moore

I hope that the taking of control is the perfect opportunity for him to articulate clearly and with some detail his plans for the club, including of course, all of the news anticipated regarding Bramley Moore.

It is the ideal time for him to stamp his authority and vision by clearly laying out his plans for the club. Furthermore, it will provide an opportunity to update shareholders on their stake in their (our) club. To not do so would miss a marvellous opportunity to build on his taking control. I am sure that is not lost on him.

Possible shareholder questions?

Perhaps the following questions could be addressed:

There is considerable uncertainty as to how exactly Bramley Moore is to be financed. Is it through the facilities created by Liverpool City Council (£280 million), and if so, how is the additional £200 million or so to be financed?

If it is not to be through Liverpool City Council, then what would the structure of a more traditional financing package look like and who would be the private sector lenders?

What are the timings for completion of the chosen financing packages, and is it still consistent with moving into Bramley Moore at the start of the 2022/23 season?

Aside from the stadium, what will be the future treatment of the £150 million “equity” injected into the club from BlueSky Capital in the Isle of Man?

Is it likely that the £150 million equity will be converted to shares, and if so at what valuation?

As mentioned above, there is likely to be a significant funding gap between borrowings and the total cost of the stadium. Will that be funded by a rights issue? If so what is the timing, and the likely terms?

Would such a rights issue be underwritten by Farhad Moshiri to ensure the successful raising of the required capital?

Increased shareholding

There’s one puzzling aspect regarding the statement today, and that is the expectation of Moshiri’s shareholding increasing to 77.2% no later than July 2019.

It suggests one of a number of  things –  there’s no confirmation that Bill will fully dispose of his shares in the future, thus there must be an agreement with shareholders other than Bill Kenwright to acquire their shares in the next 10 months or alternatively, there’s a planned change in the capital structure sometime in this period which would result in this shareholding being arrived at.

If there’s to be a rights issue largely subscribed to by Moshiri his shareholding would in all probability be much higher than the suggested 77.2%. The alternative, of course, is that new investors appear on the scene acquiring newly issued shares alongside those that Moshiri would subscribe for himself. For the avoidance of doubt I don’t believe that to be Usmanov.

Positive

So, today’s news is positive. It is a sign of Moshiri’s commitment to the club, and it lays to rest any surviving control issues relating to the previous incumbents. For that, every Blue should be grateful that we are moving on from the difficulties faced throughout the last 20 plus years.

It does however poise questions. Whilst this news will assist lenders in being more certain about the future of the club, it is a time when existing minority shareholders, fans and others associated with the club should receive a clearer picture of our future, particularly in the light of an impending stadium move.

I’ll finish with Moshiri’s words at his first AGM “There’s a window to establish ourselves. We’ll do everything we can to build a sustainable base and become part of the elite”

It would be great to know in more detail how we will achieve that under his ownership. There can be no excuses now, he is in control, we have to rejoin the elite. Nor can there be excuses for not articulating how we will do it.