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A famous classic film is called The Arsenal Stadium Mystery. I've never watched it, although it's supposed to be one of the best films with a football setting. Perhaps they could do a re-make based on the current battle for control of the North London club. They could even start with the history of the club. Arsenal started off as Woolwich Arsenal, but it was decided that a North London base could be more lucrative. Charlton Athletic came to fill the vacuum left in South-East London, but were afflicted for decades by the numbers of supporters the Gunners left behind in the area. But for the intervention of the First World War, Arsenal would have been relegated from the top flight, but managed to get re-elected as well as acquiring the Highbury site.
A good way of probing the current mystery is to take a look at some of the key players. Former sugar trader David Dein is said to have few interests outside his family, football and Arsenal. His forced resignation from the Arsenal board threatens his power base in football. He will lose his place on the FA Council if he has no club affiliation by the June meeting, the key to his menership of the international committee. Dein was opposed to the siting of the new stadium in Ashburton Grove. Some members of the board, including managing director Keith Edelman, were unimpressed by Dein's handling of the Ashley Cole 'tapping up affair', blaming him for Cole's departure to Chelsea. Dein was, however, instrumental in bringing Arsene Wenger to Highbury. However, according to today's Sunday Times, Dein has been saying, 'I'll have the last laugh. I'll be back.'
Whether that turns out to be the case depends in part on how Stan Kroenke plays his cards. Any investor with more than 10 per cent has the right to call for a shareholders' meeting at which proposals can be voted on by the club's investors. But that would probably be too aggressive a move for the essentially cautious Kroenke. If Dein sold his shares to Kroenke, he would not be far short of the 30 per cent which would require him to launch a formal takeover bid under City rules. Of course, the current board members already control over 45 per cent of the shares and wouldn't have to add many more to get to a majority stake. Kroenke is not a dabbler when it comes to business and is probably playing a long game. He is, however, said to be surprised by the board's entrenched stance against him, given that they agreed a business partnership with him in February.
Arsenal manager Arsene Wenger has been playing a typically canny game. He has said that will honour his contract which runs until the end of next season, but has not said what he will do after that. One possibility would be the England manager's job. Although Wenger has had an excellent relationship with Dein, he is said to be less enthusiastic about Kroenke. He points out that while several Premiership clubs are in foreign hands, only Roman Abramovich has adopted a 'money no object' approach. He feels that the way to build up the club is to make use of the bigger stadium capacity, living within their resources. Nevertheless, the club's £260m debt does handicap its ability to compete with the other top four clubs. The sale of 704 units in the old Highbury stadium will realise a £75m profit, but only in 2009.
Arsenal fans no doubt have a range of opinions on the situation and its likely effect on performance on the pitch. The Arsenal Supporters Trust, which has a 2 per cent shareholding in the club, is hedging its bets. They commented, 'Football's history shows that upheaval off the pitch quickly translates onto the pitch and we want all the club's major shareholders, including David Dein, to clarify its long-term future as soon as possible. The most important factor is for the club to agree a new contract with Arsene Wenger.' Significantly, they did not rule out a takeover by Mr Kroenke and Mr Dein: 'We needed some fresh blood and new commercial input but we were neither for or against a takeover. We will judge any takeover bid on its merits - and whether any such takeover would involve David Dein', suggesting at least some support for him among fans.
Let's leave the last word with an investment banker quoted in The Observer: 'What I see here is a repeat of what happened at Manchester United when the Glazer family were able to vote off directors from the Man Utd board and disrupt the running of the club until key shareholders eventually agreed to sell.'
Who Are The Arsenal Shareholders?
Stan Kroenke has increased his stake in Arsenal to 12.2 per cent, putting the existing shareholders under further pressure in what looks likely to be a takeover battle at some point. Mr Kroenke owns several US sports franchises and adding the indebted but highly promising Islington franchise to his portfolio would make commercial sense. He has bought 577 shares in three tranches over the past two weeks. Individual shares are now trading at £7,000 for the first time, an attractive price for a small shareholder. So who are the Arsenal shareholders?
Our figures don't take account of the latest Kroenke purchases, but our best guess would be that these came from smaller shareholders, so we have adjusted the figures on that assumption. In descending order, the main shareholders are: Danny Fiszman, 24 per cent; Lady Nina Bracewell-Smith, 15.9 per cent; David Dein, 14.6 per cent; Stan Kroenke, 12.2 per cent; nominee accounts (including Lansdowne Partners, 2.8 per cent), 12 per cent; 1,500 'small' shareholders, 10.8 per cent; Richard Carr, 4 per cent; Sarah Margaret Phipps-Bagge, 2 per cent; Geoffrey Klass, 2 per cent; other directors and family, 2 per cent; Peter Hill-Wood, 0.5 per cent.
Danny Fiszman is a diamond merchant now living in tax exile in Switzerland who sold a small number of his shares to Kroenke on the somewhat curious grounds that he wanted to 'tidy up' his holding. But who is the aristocratic sounding Lady Nina-Bracewell Smith? It's a reflection of globalisation that she was born in Delhi as Nina Kakkar, the daughter of an Indian diplomat. She became Lady Bracewell-Smith after becoming the second wife of Harrow-educated Sir Charles Bracewell-Smith in 1996. Sir Charles's grandfather, Bracewell, built the Park Lane Hotel in 1920, a large share in this attractive property being sold to the Sheraton Group in 1996. Sir Bracewell Smith joined the Arsenal board in 1938 and was chairman from 1949 to 1962.
Lady Nina is hardly short of a bob or two. An estimated £70m placed her 36th on the 2006 Sunday Times football Rich List. She is 60th in the list of Britain's richest women, and also among the country's richest Asians. She enjoys being one of only two female directors in the Premiership, the other being Brenda Spencer at Wigan. Lady Nina told the Arsenal official members' magazine that she is enjoying her role on the board 'immensely', adding that she likes watching the team 'very much. Although I wasn't a big football fan before my association with the club. I have to say that I am now totally hooked. I love the way we play football. I think Arsene Wenger creates fabulous teams.' It looks unlikely that she would sell her shares unless others did.
There has been some speculation, and it is just that, that David Dein could sell his shares to Kroenke and return to the club as his front man. Although many of the small shareholders are Arsenal fans, no doubt the right offer could persuade some of them to sell. This could also be true of some of the nominee accounts. Lansdowne Partners presumably hold the shares as an investment (I should mention that Hargreaves Lansdown are my stockbrokers and I hold investments with them). However, it is difficult to see how a hostile takeover bid, if it was launched, could succeed without any of the main shareholders on the board selling out which they have said they would not do. But that is not the end of the story.
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