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Announcement of planned investment and share issue

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Leicester Football Club Plc (the “Company” or “Leicester Tigers”) is pleased to announce its plans to raise up to £13.0 million by way of a share subscription from Tom Scott and Peter Tom (the “Subscription”), both existing shareholders and members of the Board.

Mr Scott has indicated to the Company that he would be willing to invest up to £10.0 million and Mr Tom has indicated that he would be willing to invest £3.0 million in the Subscription. The Board of the Company believes that the Subscription is essential to secure the Company's financial position and to enable the survival and future success of Leicester Tigers. 

Further details of the Subscription are set out in a circular (the “Circular”), which has been published today. This press release is not intended to be a substitute for the Circular and should be read in conjunction with it.

Andrea Pinchen, Leicester Tigers CEO, commented: “Tom Scott is a long-standing supporter of the club and a valued member of the Board of Directors who over his tenure with Leicester Tigers has already invested over £10 million in the club. Peter Tom has been Chairman of Leicester Tigers since 1993, having made 130 appearances for the club between 1963 and 1968 and has been a huge part in navigating the club through the professional era.

"We are very grateful that Peter and Tom are looking to extend their investments in Leicester Tigers at a time when the club is suffering some very challenging conditions from factors mostly outside of our control.

"Their decision to invest at this time will give the club the financial assurance to execute the club’s strategy of continued success and financial sustainability”.

The Takeover Code

Although the Company is not listed, as a public limited company the Takeover Code applies and therefore the Subscription is conditional upon the approval of Independent Shareholders.  A Circular providing details of the Subscription has been issued to the Company’s shareholders and accordingly a General Meeting will take place on 3 March 2023.

The Takeover Code is issued and administered by the Takeover Panel. The Takeover Code applies, inter alia, to all public companies which have their registered office in the United Kingdom. The Company is such a company and Shareholders are therefore entitled to the protections afforded by the Takeover Code.

Under Rule 9 of the Takeover Code, any person who acquires an interest (as such term is defined in the Takeover Code) in shares which, taken together with the shares in which he and persons acting in concert with him are interested, carry 30 per cent. or more of the voting rights in a company that is subject to the Takeover Code, is normally required to make a general offer to all of the remaining shareholders to acquire their shares.

Similarly, when any person, together with persons acting in concert with him, is interested in shares which in aggregate carry not less than 30 per cent. of the voting rights but does not hold shares carrying more than 50 per cent. of the voting rights of such a company, an offer will normally be required if any further interests in shares are acquired by any such person or any person acting in concert with that person.

Such an offer would have to be made in cash at the highest price paid by the person required to make the offer, or any person acting in concert with such person, for any interest in shares of the company during the 12 months prior to the announcement of the offer.

A shareholder will, in such circumstances, incur an obligation to make a mandatory offer unless the consent of the Takeover Panel to a waiver of such an obligation is obtained.

Implications for the Subscription

The Subscription will comprise an Initial Subscription and a Further Subscription.  As soon as possible following the General Meeting, the Company will receive £8.3 million, with Peter Tom investing £3.0 million and Tom Scott investing £5.3 million.  A further £4.7 million will be the subject of a call option whereby the Company will have the unconditional right, following 3 June 2023, to require Mr Scott to subscribe for up to £4.7 million.

Tom Scott has a beneficial interest in Ordinary Shares both directly and indirectly through his nominees, Round Circle and Sealyham, totalling 45.32 per cent. of the Existing Ordinary Shares. Upon completion of the Initial Subscription, Tom Scott's beneficial shareholding in the Company will increase from 45.32 per cent. of the Existing Ordinary Shares to approximately 59.25 per cent. of the Initial Enlarged Share Capital, giving rise to obligations under the Takeover Code which are explained further below. Were the maximum number of shares pursuant to the Further Subscription issued, Tom Scott's beneficial shareholding in the Company would increase from 59.25 per cent. of the Ordinary Shares then in issue to approximately 71.42 per cent. of the Enlarged Share Capital.

Similarly, upon completion of the Initial Subscription, Peter Tom’s beneficial shareholding in the Company will increase from 8.6 per cent. of the Existing Ordinary Shares to approximately 29.30 per cent. of the Initial Enlarged Share Capital. Were the maximum number of shares pursuant to the Further Subscription issued, Peter Tom's beneficial shareholding in the Company would decrease from 29.30 per cent. of the Ordinary Shares then in issue to approximately 20.55 per cent. of the Enlarged Share Capital. In the event that Peter Tom increases his beneficial shareholding in the Company to over 30 per cent. then obligations under the Takeover Code would arise, as explained above.

Following the Initial Subscription, Tom Scott will be interested in Ordinary Shares carrying more than 50 per cent. of the voting rights of the Company and may accordingly increase his aggregate interests in shares without incurring any obligation to make an offer under Rule 9. In the event that the Independent Shareholders vote in favour of the Waiver Resolution at the General Meeting, Tom Scott will not be restricted from making an offer for the Company.

Without a waiver from the Takeover Panel and the approval of the Independent Shareholders, the Subscription would give rise to a requirement for Tom Scott to make a mandatory offer for all of the outstanding shares in the Company. The Takeover Panel has agreed with the Company to grant the Rule 9 Waiver, subject to the passing of the Waiver Resolution at the General Meeting by the Independent Shareholders on a poll.

The Subscription is conditional upon Shareholders voting in favour of the Waiver Resolution and upon the Company receiving approval from DCMS for it to proceed and the Board is in dialogue with DCMS regarding the proposals.

Recommendation

The Independent Directors, who have been so advised by Singer Capital Markets, consider that the terms of the Subscription and the Rule 9 Waiver are fair and reasonable and in the best interests of the Independent Shareholders and the Company as a whole. In providing advice to the Independent Directors, Singer Capital Markets has taken into account the Independent Directors’ commercial assessments.

The Independent Directors unanimously recommend that Shareholders vote in favour of the Resolutions, as they have undertaken to do in respect of their own beneficial holdings.

If the Resolutions are not passed then the proceeds of the Initial Subscription and the Further Subscription will not be received by the Company and the Board would have to find urgent alternative funding.

Further Information

Further information is available in the Circular at www.leicestertigers.com/generalmeeting.