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Re: HJ Due Dilligance On the CLUB

2 by Taunton Iron Cider
The Club does seem to have partially shut down for reasons that have yet to be explained. Our game against Oldham had no hospitality, not for the first time, and very few adverts showing along with no match sponsors, this serves to indicate that perhaps inexplicably our Commercial Department is operating at a much reduced level of activity. Such obvious disorganisation will inevitably give rise to rumour, but as HJ was in attendance last Saturday that would suggest to me that he has not walked away from any takeover.

All that said, I do have concerns that with the Club clearly rudderless that losses may be running higher than forecast, such an event could indeed give rise to a pause if the deficit was now at a level which makes HJ feel uncomfortable.

Re: HJ Due Dilligance On the CLUB

5 by Chepstow'sFine
flat4 wrote: November 9th, 2023, 6:58 pm Where are we at?????
There is a lot of speculation about all is not well.

Semms the FA are happy with there side.

Anyone wish to comment.
What speculation? Nothing really on here or ATC that I can see & Facebook is largely full of eejits. Feels like it's dragging but I'd posit that there's nothing wrong whatsoever and it's just a slow process.

Re: HJ Due Dilligance On the CLUB

6 by Chris Davis
flat4 wrote: November 9th, 2023, 8:16 pm
Jonesy3 wrote: November 9th, 2023, 8:01 pm From the club website on Monday…
https://www.newport-county.co.uk/news/2 ... nvestment/
Sadly that is nothing more than Bull SH1T
Chris Davis will doubt say different.
I would say that it seem that the transfer agreement at a basic level is not likely to be over complicated. Essentially, it seems to me that it says "You must give me £500k immediately and we will give you 67% of the shares". All the rest of the stuff are aspirations that would be difficult to put into a contract. Unless that's what the difficulty is i.e. they are trying to make the unenforceable enforceable, as far as they can.

As to the Memorandum and Articles, I don't know what is necessary to change there and what may be complicated in that.

The press release gives no indication of what the exact complexities are. As I am like any other fan, I have no more idea of what is happening between the AFC and HJ than anyone else. However, we are all in the hands of the negotiating teams, which I would hope are being appropriately advised by professional advisors.
Last edited by Chris Davis on November 10th, 2023, 7:58 am, edited 1 time in total.

Re: HJ Due Dilligance On the CLUB

7 by OLDCROMWELLIAN
HJ's proposal states that his due diligence into the club was to be completed by 31st Oct. The latest club website announcement makes no mention of this, yet states both parties are working through the documentation necessary to change control. Would they be doing so if the due diligence hasn't been completed to HJ's satisfaction? It was intimated at the last Trust members meeting that the whole process would hopefully be completed by the end of December. That's over 6 weeks away. Are some simply being impatient?

Re: HJ Due Dilligance On the CLUB

9 by Bangitintrnet
Percy plunkett wrote: November 9th, 2023, 11:51 pm Our Commercial Manager left some weeks ago and I am not aware that he has been replaced.Some fans were critical of Matt saying that he didn’t do much.The lack of recent movements ie hospitality,sponsors etc suggest that he was doing a decent job and without his successor then everything has ground to a stop.
It is also the case that the Rodney Parade manager is on the sick at present. Both clubs have indicated a willingness to work together, so it is likely that recruitment is on hold on both sides IMO.

Re: HJ Due Dilligance On the CLUB

10 by owlsabout
Percy commercially we are and have been poor for years which as an impact on our budget. I get the process of the takeover will take time but our board seem to down tools ,SJ at first meeting apologise for the way they have treated the fans and promised more transparency . I've no doubt when HJ is running the club we will see improvements but until then a little update or something from these lot wouldn't no a miss

Re: HJ Due Dilligance On the CLUB

11 by Chris Davis
In my understanding, in order to change the Memorandum and Articles of Association it is necessary to have a special resolution or resolutions of the company. The implication from the press announcement seems to be that the Memo and Articles are being changed before the share transfer is made. If that is the case then the shareholders of the AFC should approve the special resolutions before thay can come into effect and thus the share transfer can come into effect. So, in my view, it will be necessary to call a special or extraordinary general meeting of the AFC in order for the shareholders of that company to approve the proposed changes. A special resolution requires a 75% majority. This should cause no problem because pre-transfer the Trust has a 78% share and the Trust inevitably will vote in favour. This, I think, supports my view that these resolutions must be approved before the share transfer because after the transfer no group of shareholders by itself will have a 75% majority although of course HJ and the Trust combined will have such a majority.

There may be a view that the BOD of the Trust should come back to the Trust members to confirm that they should vote for or against the AFC special resolutions, which obviously would add to the timescale. However, against this it could be succesfully argued that the Trust BOD have already received a mandate to both transfer the shares and do all that is necessary to achieve that. So, I don't think that is going to happen or should happen "provided that such terms are materially consistent with the investment proposal." as per the approved combined resolution.

It is also interesting that the application of TUPE (Transfer of Undertakings (Protection of Employment) Regulations) has not been mentioned. These regulations are designed to protect employees when the business they work for undergoes a transfer from one employer to another . This can be quite a time consuming requirement as, if full due diligence is carried out, it requires identifying the contract of employment terms of each employee affected by the business transfer. If these contracts do not exist or are incomplete, then this can add to the time scale in order to precisely identify the contractual obligation the new owner will be taking on. It does not apply when there is simply a transfer of shares without the new shareholder taking any active part in running the business. However, I do not think that this is the case here, where clearly HJ does plan to take an active part in how the 'AFC business' is run.

Re: HJ Due Dilligance On the CLUB

12 by Taunton Iron Cider
Chris Davis wrote: November 10th, 2023, 8:56 am In my understanding, in order to change the Memorandum and Articles of Association it is necessary to have a special resolution or resolutions of the company. The implication from the press announcement seems to be that the Memo and Articles are being changed before the share transfer is made. If that is the case then the shareholders of the AFC should approve the special resolutions before thay can come into effect and thus the share transfer can come into effect. So, in my view, it will be necessary to call a special or extraordinary general meeting of the AFC in order for the shareholders of that company to approve the proposed changes. A special resolution requires a 75% majority. This should cause no problem because pre-transfer the Trust has a 78% share and the Trust inevitably will vote in favour. This, I think, supports my view that these resolutions must be approved before the share transfer because after the transfer no group of shareholders by itself will have a 75% majority although of course HJ and the Trust combined will have such a majority.

There may be a view that the BOD of the Trust should come back to the Trust members to confirm that they should vote for or against the AFC special resolutions, which obviously would add to the timescale. However, against this it could be succesfully argued that the Trust BOD have already received a mandate to both transfer the shares and do all that is necessary to achieve that. So, I don't think that is going to happen or should happen "provided that such terms are materially consistent with the investment proposal." as per the approved combined resolution.

It is also interesting that the application of TUPE (Transfer of Undertakings (Protection of Employment) Regulations) has not been mentioned. These regulations are designed to protect employees when the business they work for undergoes a transfer from one employer to another . This can be quite a time consuming requirement as, if full due diligence is carried out, it requires identifying the contract of employment terms of each employee affected by the business transfer. If these contracts do not exist or are incomplete, then this can add to the time scale in order to precisely identify the contractual obligation the new owner will be taking on. It does not apply when there is simply a transfer of shares without the new shareholder taking any active part in running the business. However, I do not think that this is the case here, where clearly HJ does plan to take an active part in how the 'AFC business' is run.
Surely TUPE doesn’t apply as the employer, Newport Association Football Club Limited, does not change its only the shareholding of that business.

Re: HJ Due Dilligance On the CLUB

13 by Stan A. Einstein
I genuinely don't know the answer and if anyone does I would be grateful.

It seems to me that back in July/August when Huw Jenkins expressed an interest in obtaining Newport County that at that point all the necessary formalities could have been completed then. Huw Jenkins history with Swansea would have meant the fit and proper persons test is a formailty. Further if I were taking over a company I would want to look at the books before I made an offer.

Further even if there is a necessity to take this long I fail to understand why Huw Jenkins doesn't now act as the de facto chairman of the club.

Unlike some I am not as expert on every single topic and company acquisition is something on which I know next to nothing. I would be interested in the informed opinion of those who do.

Re: HJ Due Dilligance On the CLUB

14 by Chepstow'sFine
https://www.theguardian.com/football/20 ... s-analysis

I think we're a test case because the EFL have been made to look foolish before with numerous terrible owners. The irony is that HJ is one of the least bandit like football owners you'll ever find. That's the only reason it feels like it's dragging. You have to remember that we're not privy to things behind the scenes and like selling a house for example you're at the whim of an Administrator remembering to post a letter or send an email etc so delays are inevitable not a sign that it's going tits.
Last edited by Chepstow'sFine on November 10th, 2023, 10:41 am, edited 1 time in total.

Re: HJ Due Dilligance On the CLUB

15 by Chris Davis
Taunton Iron Cider wrote: November 10th, 2023, 9:54 am
Chris Davis wrote: November 10th, 2023, 8:56 am In my understanding, in order to change the Memorandum and Articles of Association it is necessary to have a special resolution or resolutions of the company. The implication from the press announcement seems to be that the Memo and Articles are being changed before the share transfer is made. If that is the case then the shareholders of the AFC should approve the special resolutions before thay can come into effect and thus the share transfer can come into effect. So, in my view, it will be necessary to call a special or extraordinary general meeting of the AFC in order for the shareholders of that company to approve the proposed changes. A special resolution requires a 75% majority. This should cause no problem because pre-transfer the Trust has a 78% share and the Trust inevitably will vote in favour. This, I think, supports my view that these resolutions must be approved before the share transfer because after the transfer no group of shareholders by itself will have a 75% majority although of course HJ and the Trust combined will have such a majority.

There may be a view that the BOD of the Trust should come back to the Trust members to confirm that they should vote for or against the AFC special resolutions, which obviously would add to the timescale. However, against this it could be succesfully argued that the Trust BOD have already received a mandate to both transfer the shares and do all that is necessary to achieve that. So, I don't think that is going to happen or should happen "provided that such terms are materially consistent with the investment proposal." as per the approved combined resolution.

It is also interesting that the application of TUPE (Transfer of Undertakings (Protection of Employment) Regulations) has not been mentioned. These regulations are designed to protect employees when the business they work for undergoes a transfer from one employer to another . This can be quite a time consuming requirement as, if full due diligence is carried out, it requires identifying the contract of employment terms of each employee affected by the business transfer. If these contracts do not exist or are incomplete, then this can add to the time scale in order to precisely identify the contractual obligation the new owner will be taking on. It does not apply when there is simply a transfer of shares without the new shareholder taking any active part in running the business. However, I do not think that this is the case here, where clearly HJ does plan to take an active part in how the 'AFC business' is run.
Surely TUPE doesn’t apply as the employer, Newport Association Football Club Limited, does not change its only the shareholding of that business.
It is a difficult area in complex and technical legislation - the TUPE regulations. In my opinion, it would not apply where there was a simple transfer of shares to a new shareholder and which had no implications for control of the day to day running of the business. So, if HJ was simply buying the shares as a passive investment, I do not think that TUPE would apply. However, I think that it is more likely to apply when a transferee of shares does take over day to day control of the business, as HJ plans to do.

Most advice available from the web does not go into great detail and particularly on share transfer situations where there is also a change in control but where it does it indicates that where active control takes place at the same time as a majority share transfer, then TUPE may apply. This is how it is expressed on one site "However, if the change in share ownership is part of a broader transaction that involves the transfer of the business or undertaking, TUPE may apply. For example, if the new majority shareholder takes over the management and control of the company and there is a transfer of the business as a whole, TUPE might come into play."

In terms of due diligence and the time that may take to prolong the process, which are the main issues in this thread, i don't think it matters either way. An incoming owner would want to know in detail the obligations imposed on him by the employment contracts and particularly the financial obligations arising
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