Shareholders in Everton Football Club Company Limited have received the following letter from the Board of Directors

18 December 2024

Dear shareholder,

We hope this communication finds you well.

We write to you regarding the proposed purchase by Roundhouse Capital Holdings Limited (Roundhouse), an affiliate of The Friedkin Group (TFG) of the entire majority shareholding in Everton Football Club Company Limited (the Club) held by Blue Heaven Holdings Limited (Blue Heaven), an entity ultimately owned by Farhad Moshiri. 

We are pleased to confirm the transaction has received the prerequisite regulatory approvals from the Premier League, The Women’s Professional League Limited and the Financial Conduct Authority. The transaction is expected to complete imminently.

Due to new Premier League rules relating to Associated Party Transactions (APT) and as part of the steps to complete the transaction Blue Heaven will carry out a debt-for-equity conversion to capitalise its shareholder loan balance. Under this arrangement the existing shareholder loan from Blue Heaven to the club will be settled and converted into 150,250 shares. 

This capitalisation will  result in Blue Heaven Holdings c.97.2% of the Club’s total issued share capital. Blue Heaven’s entire shareholding will then be purchased by Roundhouse at the completion of the transaction. In addition to ensure the club does not negatively impact its Profit and Sustainability Rules (PSR) position and facilitating completion of the transaction, the capitalisation will also strengthen the Club’s balance sheet and ensure a significant debt is settled immediately prior to completion.

In addition, immediately following, and in connection with completion, Roundhouse will provide further investment into the Club by way of a subscription of 1,336,537 ordinary shares. Again, due to changes in the APT rules, this investment is taking the form of an equity subscription to avoid any negative implications on the Club’s investment in the playing squad. Following the completion of the transaction and this subscription, Roundhouse will own c.99.5 of the issued shares in the Club.

The Club is putting forward the enclosed Written Resolutions to facilitate the capitalisation and the subscription and therefore, completion of the transaction. A summary of the resolutions is set out below:

Resolution to shareholders

Resolution 1 – This resolution proposes to clarify and remove any historic restriction on the club’s authorised share capital

Resolution 2 – This resolution proposes to give authority to the Club’s directors to issue a total of 1,486,787 ordinary shares consisting of (i) 150,250 shares to complete the proposed capitalisation and (ii) the additional 1,336,537 shares which Roundhouse will subscribe for immediately following, and in connection with, completion of the transaction

Resolution 3 – This resolution proposes to disapply statutory pre-emption rights to enable the Club’s directors to issue the shares required to effect the capitalisation and the subscription on a non-pre-emptive basis.

The Written Resolutions which we can confirm Blue Heaven will vote in favour of, are being sent to all shareholders.

In simple terms,

Blue Heaven Holdings will subscribe for 150,250 new shares, thereby capitalising the current circa £450 million shareholder loan (ie converting debt to equity).

That will give Blue Heaven a total of 277,281 ordinary shares in Everton. Total number of shares issued at that point will be 285,250 ordinary shares. Therefore Blue Heaven Holdings’ holding increases to 97.2%.

This holding will be purchased by Roundhouse (Friedkins) giving them control of the Club.

Everton will then issue a further 1,336,537 ordinary shares which Roundhouse will immediately subscribe for (ie provide fresh investment into the club to pay down debt and provide additional working capital).

Everton will then have in total 1,621,787 ordinary shares in issue, held as follows:

Roundhouse (Friedkins) – 1,613,818 ordinary shares (99.5%)

All other existing shareholders – 7,969 ordinary shares (0.5%)

I hope this helps shareholders and fans understand the future ownership of Everton Football Club