Seps programme notes. (7 Viewers)

[chiefdave]

They want a profit on the original purchase value obviously, it can be the only reason.

If you account for inflation then to get back what they put in Higgs would need to sell for £8.7m.

 

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[RoboCCFC90]

And as Justice Leggatt pointed out, Sisu are not a charity. So why offer £2.5million for something deemed worthless?

Like I said, nobody (on the outside at least) really knows the true intricacies of what has gone on.

I suspect we will find out more during the JR - but I also suspect it may be some time before we get the complete truth of it all. If, indeed, we ever do.


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Do you think this may of been what Joy Seppala referred to yesterday when her Programme notes stated "committed funds substantially exceeding the economic value of the stadium"?

One can only consider that the value of the Higgs share of ACL is equivalent to 50% of the below.

ACL own just over 80% of the shares in IEC, Compass own the remaining 20%. All that has to be done is a negotiation to establish a fair price for the shares that could be tied in with a long term, nominal costs rental agreement.

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[RoboCCFC90]

If you account for inflation then to get back what they put in Higgs would need to sell for £8.7m.

So why did Chris West value such at £5.5m?


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[Nick]

And as Justice Leggatt pointed out, Sisu are not a charity. So why offer £2.5million for something deemed worthless?

Like I said, nobody (on the outside at least) really knows the true intricacies of what has gone on.

I suspect we will find out more during the JR - but I also suspect it may be some time before we get the complete truth of it all. If, indeed, we ever do.


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No offence, but you seem a bit eager to defend the Higgs / ACL

IF it was actually valued at nothing (in black and white on paper) and they offered £2.5 million then surely they are offering more than it is worth?

I am not sure why SISU would need to be a charity to give a charity money (if that was the case)?

 

[Nick]

So why did Chris West value such at £5.5m?


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And way over the market value at that

It isn't about what they put in, it is about what it is worth....

 

[RoboCCFC90]

And way over the market value at that

It isn't about what they put in, it is about what it is worth....

Yet the negotiations went sour? Makes no sense to me..


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[skybluetony176]

Ahhh but surely they were just helping the club out being supporters? They wouldn't want profit would they?

Seeing as they were willing to accept the offer of £5.5M I don't see what your point is.

 

[chiefdave]

So why did Chris West value such at £5.5m?

There's two ways off looking at it.

One is that Higgs were doing us a favour and should therefore get back what they put in. The question was asked why they were asking for more than the original price, a possible reason for this is to account for inflation.

The second way would be selling it at its value today and that's open to all sorts of arguments such as is there a need to sell which could lower the price, valuation based on past performance, valuation based on future projections. That would explain why valuations can vary.

 

[SimonGilbert]

No offence, but you seem a bit eager to defend the Higgs / ACL

IF it was actually valued at nothing (in black and white on paper) and they offered £2.5 million then surely they are offering more than it is worth?

I am not sure why SISU would need to be a charity to give a charity money (if that was the case)?

I'm not here to defend anyone. But I will try to provide balance and context whenever possible.

As we have attempted to do here http://www.coventrytelegraph.net/news/coventry-news/sisu-blame-politicians-coventry-city-7038090

You are right in saying that if it was valued at nothing, Sisu made two offers significantly above market value. However, at this stage, all we know is that there was disagreement over value - ranging from £7.5million to £0.

The issue we have at the moment is that, while ACL and Sisu have made many public statements in wake of the court case, CCC are unwilling to make any public statements or clarifications. Hopefully this will change after the JR.

I'm sure some of the information which comes out during the JR will provide a more complete picture regardless.




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[RoboCCFC90]

There's two ways off looking at it.

One is that Higgs were doing us a favour and should therefore get back what they put in. The question was asked why they were asking for more than the original price, a possible reason for this is to account for inflation.

The second way would be selling it at its value today and that's open to all sorts of arguments such as is there a need to sell which could lower the price, valuation based on past performance, valuation based on future projections. That would explain why valuations can vary.

I can understand the reason that Higgs would of wanted to recoup the original £6m(?) that they purchased the 50% share for, but to me it makes no sense why Sisu would agree to purchase the Shares for £7.5m all but for the negotiations to fall face flat. There has to be more to it, Joy stated that they were committed to the deal, what made the negotiations fall sour?


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[Nick]

I can understand the reason that Higgs would of wanted to recoup the original £6m(?) that they purchased the 50% share for, but to me it makes no sense why Sisu would agree to purchase the Shares for £7.5m all but for the negotiations to fall face flat. There has to be more to it, Joy stated that they were committed to the deal, what made the negotiations fall sour?


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[RoboCCFC90]

But that was a whole year later was it not? The HOT were agreed in 2012?


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[skybluetony176]

But that was a whole year later was it not? The HOT were agreed in 2012?


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I blame Andy Thorn.








This post was made on behalf of grendull.

 

[Astute]

I see we have a few with select memories as usual.

Higgs put 6.5m into our club for their share of ACL. They agreed to sell it to SISU for 5.5m cash. SISU offered 1.5m cash and the rest over 10 years. Higgs asked for proof of funds. SISU refused. Higgs didn't accept the offer.

When did Higgs ever ask for more than they paid our club?

 

[dongonzalos]

I can understand the reason that Higgs would of wanted to recoup the original £6m(?) that they purchased the 50% share for, but to me it makes no sense why Sisu would agree to purchase the Shares for £7.5m all but for the negotiations to fall face flat. There has to be more to it, Joy stated that they were committed to the deal, what made the negotiations fall sour?


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Am I imagining it or are they not saying they did due diligence ( for ages) well past the exclusivity period and they were still doing due diligence despite everyone thinking they were no longer interested because they didn't tell anyone they were still doing it. Then they decided it was worth nothing but because they are a charity they would offer 2 million.

I am not saying this happened but could it be possible that they did due diligence after looking at the books they thought ACL can't survive without the rent. A little bit of pressure and we could get it for a lot lot less?


(Attending Sixfields does not prolong our stay at Sixfields. It is in fact one of life's greatest paradox's. Well that's not strictly true but if it makes you feel better ........)

 

[ccfcway]

No offence, but you seem a bit eager to defend the Higgs / ACL

and you seem a bit eager comment about anyone who seems a bit eager to defend Higgs / ACL

 

[Nick]

and you seem a bit eager comment about anyone who seems a bit eager to defend Higgs / ACL

It depends in what capacity they are posting

 

[James Smith]

Ahhh but surely they were just helping the club out being supporters? They wouldn't want profit would they?

The Charity Commission rules (if I've read them correctly) say that basically if you invest you cannot use Charity funds in a way that would "erode the capital of the fund" and that generally trustees should look to get maximum return on that investment. https://www.charitycommission.gov.u...investment-matters-a-guide-for-trustees-cc14/

So I guess they can't give the share away and they have to try and get as much for the share as they can or get into hot water with the Charity Commission.

 

[Grendel]

The Charity Commission rules (if I've read them correctly) say that basically if you invest you cannot use Charity funds in a way that would "erode the capital of the fund" and that generally trustees should look to get maximum return on that investment. https://www.charitycommission.gov.u...investment-matters-a-guide-for-trustees-cc14/

So I guess they can't give the share away and they have to try and get as much for the share as they can or get into hot water with the Charity Commission.

They are likely to lose money though arent they? The asset is hardly appreciating in value.

I think you place far too much emphasis on the charity commission, many charities have lost money on investments and I fail to see what action can be taken. Didn't the regeneration charity that owned a portion of the Brittania pretty much hand it to them - the council and they transferred the mortgage debt and that was it want it?

 

[James Smith]

So based on those rules they may have felt at the time that the £5.5m offer (£1.5m upfront and £4m later) was reasonable but didn't trust that they'd see the remaining £4m over 10years from Sisu. The £2.5 then offered was possibly way too low and later on if ACL started to do better maybe they felt they could get back at least the amount they paid for the share.

 

[Grendel]

So based on those rules they may have felt at the time that the £5.5m offer (£1.5m upfront and £4m later) was reasonable but didn't trust that they'd see the remaining £4m over 10years from Sisu. The £2.5 then offered was possibly way too low and later on when ACL started to do better maybe they felt they could get back at least the amount they paid for the share.

And if it doesn't and they get less they will be in hot water with the Charity Commission?

 

[Jack Griffin]

So you don't know what the PWC valuations were?

Why is it that Chris West feels that 5.5 mill was way over market value but Higgs said it was 7.5 million?

Maybe the £7.5M comes from the original option formula, which I believe was designed to protect both parties.

 

[dongonzalos]

It depends in what capacity they are posting

What different capacities do people have?

 

[James Smith]

They are likely to lose money though arent they? The asset is hardly appreciating in value.

I think you place far too much emphasis on the charity commission, many charities have lost money on investments and I fail to see what action can be taken. Didn't the regeneration charity that owned a portion of the Brittania pretty much hand it to them - the council and they transferred the mortgage debt and that was it want it?

Will they lose money though? I guess it depends on how well ACL does in the future. If ACL are doing better, really don't need us and can generate enough profit for the Higgs share to be attractive enough even without our club to another investor then they might get their money back. Alternatively ACL might do very badly and the value of the share might drop to nigh on worthless and they might get nothing back. It all depends on how well ACL does.

 

[Grendel]

Will they lose money though? I guess it depends on how well ACL does in the future. If ACL are doing better, really don't need us and can generate enough profit for the Higgs share to be attractive enough even without our club to another investor then they might get their money back. Alternatively ACL might do very badly and the value of the share might drop to nigh on worthless and they might get nothing back. It all depends on how well ACL does.

According to you they have to get the best price. Despite the spin on here profits are down. Very few institutions would have much interest in purchasing a management company of this sort. So if they ultimately get less will they be in hot water with the charity commission?

If not then one assumes they would not if they accepted the £2 million offer as the other offer was according to Mr West significantly over valued.

 

[James Smith]

And if it doesn't and they get less they will be in hot water with the Charity Commission?

As I see it and I may be wrong on this the Higgs are reliant on the money old man Higgs left to set up the charity, Mrs PWKH I think confirmed that in her interview in the telegraph. So therefore losing £6.5m which from memory from the last set of accounts was a large chunk of their funds would probably not be popular and raise questions. The Charity Commission are the regulators and I think look at charities in much the same way as shareholders do and would do if a firm lost a significant percentage of its value.

 

[Astute]

According to you they have to get the best price. Despite the spin on here profits are down. Very few institutions would have much interest in purchasing a management company of this sort. So if they ultimately get less will they be in hot water with the charity commission?

If not then one assumes they would not if they accepted the £2 million offer as the other offer was according to Mr West significantly over valued.

Mr North said it is worth 5m. Mr South said it is worth 7.5m and Mr East said it is worth 10m. It doesn't matter. It has nothing to do with them. It is up to Higgs to sell it for a valuation that they are happy with. If SISU keep offering them amounts that they are not happy with, and they have already tried selling to them for 1m less than they paid, they don't have to sell to them.

 

[ccfcway]

Mr North said it is worth 5m. Mr South said it is worth 7.5m and Mr East said it is worth 10m.

Are they interested in buying a football club ?

On a side note, do these 4 own Compass :facepalm:

 

[James Smith]

According to you they have to get the best price. Despite the spin on here profits are down. Very few institutions would have much interest in purchasing a management company of this sort. So if they ultimately get less will they be in hot water with the charity commission?

If not then one assumes they would not if they accepted the £2 million offer as the other offer was according to Mr West significantly over valued.

We haven't seen the current books of ACL and the last set of accounts don't cover our having left the Ricoh I believe and include the olympics which appear to have been a mixed blessing. So we don't know how well ACL are currently doing and I'd be interested to know what you've seen of their books.

I'd guess and obviously that's all I can do that that they are confident enough in the performance of ACL to hang on to the investment and reject lower offers. The values quoted in the court documents are from 2012 so hardly up to date and might be higher or lower now. As I said before if the value of ACL dropped to a level where they lost all their money then questions from the Commission wouldn't be out of the question.