It All Goes Off At Spurs - 03/11/03

Spurs has been wracked by a boardroom battle over a bond issue that led to the resignation of non-executive director Howard Shore 'who is renowned in the City for his aggressive style' according to the Sunday Times. Shore owns about 1 per cent of Spurs, but manages another 3-4 per cent on behalf of private clients of his Shore Capital boutique investment bank. The battle erupted after the club had revealed a £7.1m loss for the year ended 30 June. Shore was strongly opposed to plans of Spurs plc chairman Daniel Levy to attract funds through a convertible bond. Shore is believed to have seen this as an attempt by Levy to gain even more influence over Spurs, the club he controls through a 29 per cent holding via Enic, his private investment vehicle. He argued that because Enic would be the underwriters of the issue, if other shareholders decided not to purchase their allocation of convertible bonds then Enic would be left with the balance, giving them greater control. Shore's departure makes the revival of the bond scheme more likely, although an early announcement is not expected.

Levy had originally intended to launch a rights issue, but after sounding out the market he quickly came to the conclusion that the club needed to try a different approach. Football financier Keith Harris, who is chairman of brokers Seymour Pierce, worked out a scheme whereby shareholders would be offered the chance to invest now in return for shares or cash in six years' time. Without knowing all the details, this doesn't seem a very attractive deal on the face of it to me, but, hey, that's football finance. Fans will do things for their club they would do for hardly anyone else. As part of the deal, the club was also planning to move from the main stock market to Aim which would certainly save them money. However, Shore was thought to suspect that this was part of a plan to take Spurs private, something that has been categorically denied by sources close to Levy.

The losses reported by Spurs contrasted with a pre-tax profit of £946,000 in the preceding year. Turnover rose slightly from £65m to £66.5m. Player write downs, including a £5.1m write down of Sergei Rebrov, have depleted the balance sheet which is one reason why money needs to be raised. Before the results were announced, finance director Paul Viner left the club 'by mutual agreement' after only a year in the post. He was replaced by Matthew Collecott from Enic.