1st share issue was over subscribed but not the 2nd one , came at the wrong time financially
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FERGUS McCann yesterday detailed plans to disperse his majority shareholding in Celtic among fans, private investors and a handful of City institutions for #40.3m.
Existing shareholders, season ticket holders, Celtic players and club employees are being encouraged to subscribe for 10 million of the 14.4 million shares which McCann is selling at 280p each - a 12% discount to their closing price of 317.5p last Friday.
A further 4.4 million shares have been placed at the same price with 12 City institutions, only two of which currently own shares in the club.
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Advisers to McCann said the institutional offer was nearly one-and-a-half times oversubscribed.
McCann flew in from his tax exile in France to tell a press conference at Celtic Park yesterday that he had honoured his pledge to prevent the club falling into the hands of a single owner. ''This is an opportunity for the ownership of Celtic to change in such a way that it will be of benefit to Celtic itself and to the shareholders and supporters as a body,'' he said.
Celtic shares, which closed last night at 315p, have been trading above 280p for most of the last year, but Paul Wedge, a leisure analyst at London stockbroker Colin Stewart, said McCann had done well to get his shares away at such a high price.
McCann estimated that the sale of his 50.3% stake would leave 40%-45% of Celtic's shares in the hands of fans and other small-scale private investors. City institutions will control just over 22%, assuming there are no shares left over for them to mop up.
Individuals who held up to 716 Celtic shares on the record date of September 8 will be entitled to buy at least 250 more shares at 280p each and possibly up to 500, depending on demand. Those with bigger holdings will be entitled to subscribe for more.
To assist such small-scale purchases, McCann is offering a year's interest-free loan of #1040 to every shareholder and season ticket holder who buys at least 500 shares.
But Dennis McGuinness of Irish stockbroker Dolmen Butler Briscoe noted that investors could get a cheaper deal by buying Celtic Preference shares on the open market at 255p. These can be converted into Ordinary shares in 2001.
McCann, who saved Celtic from near-bankruptcy in 1994 and steered it back to robust financial health, will walk away with a net gain of more than #27m on his
initial investment of #9m.
That is after paying a #2m bill for advisers' fees and making a donation of up to #1.5m towards the cost of a new Celtic training academy.
The size of his gift will depend on the level of uptake by existing shareholders and season ticket holders.
Finance director Eric Riley said it would cost up to #10m to build the planned academy and two potential sites had already been identified for it.
McCann, who invested two-thirds of his personal fortune in Celtic five years ago, has quadrupled his money since then.
But the Scots-Canadian millionaire said other investors who bought shares when he took over in March 1994 were getting an even better deal. They had paid #60 each for shares which were now worth nearly four times as much, but had been spared the hard work needed to turn Celtic's fortunes around, he noted.
''I feel quite good about the situation,'' he said. ''Everyone else has done better than Fergus McCann.''
The club's biggest shareholder going forward will be Irish millionaire Dermot Desmond. He will eventually end up with nearly 20% of the equity.
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Desmond presently owns 5% of Celtic's Ordinary shares and
nearly 28% of its Preference shares, which do not carry voting rights.
The Irishman is committed to buying a large chunk of McCann's paper, which will take his stake of ordinary shares up to 14.7%. If he converts all his Preference shares into Ordinary shares after June 30, 2001, he will end up with a 19.8% stake in the club. McCann said no other individual or institution would own more than 10% of Celtic once his shares had been sold.
He declined to reveal which institutions were putting money into the club, but chief executive Allan Macdonald said no media groups were involved. Macdonald, a former senior executive at British Aerospace, did not rule out a large media group buying into the club at some stage. But he said this would only happen once the sale of McCann's shares had been completed in October.
McCann, who has been living abroad for tax reasons since April, handed over his executive powers to Macdonald on July 1 to become a non-executive director.
He will quit the board at
the club's annual meeting on October 4.
McCann is retaining 200,000 shares in Celtic for the time being to meet obligations under options granted to key personnel in the club.
Applications for the shares he is selling must be submitted by October 11.
Celtic has set up a telephone helpline for investors - 0141 333 1967
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