SHARE OWNERSHIP

Shares in Everton FC Co Ltd are closely held.  They are privately traded and do not often become available, rare transactions generally being through the club's brokers, Blankstone Sington (0151 707 1707).  There is no official share price, so the cost of shares is governed by how much one is prepared to sell or pay for them, with the price dropping significantly for bulk lots.  Individual shares are currently changing hands for somewhere in the range of £1,250 to £1,500.  Everton's annual accounts include a listing of share ownership at Board level.  This was the situation at the end of May 2006:
  

Interestingly, the Articles of Association used to require that each director hold at least 3 shares in The Company...  Paul and Anita Greg left the Board after selling their shares to Robert Earl in 2006.  Sir Philip Carter (721 Shares), Keith Tamlin (119 Shares) and Arthur Abercromby (1,935 Shares) all left the Board in the summer of 2004.

The current share value (December 2006) is is probably around the £1,200 paid by Robert Earl for the Greegs' shares, with 35,000 shares outstanding.  This gives the club a nominal book-value of around £30M.  Almost 25,000 shares were held by True Blue Holdings, the consortium Bill Kenwright put together (with the help of Paul Gregg and John Woods) to buy out Peter Johnson in 1999 (see below).  TBH was voluntarily wound up on 2 December 2004.  Paul Gregg and family later sold theri approximately 8,145 Everton shares, making a £2M profit on their £7M investment in the Club.

Lord Grantchester used to own 2,773 (7.9%) Everton shares... perhaps he still does?  That leaves around 5,600 owned by others, including regular fans with as few as one share each.
  

FORTRESS SPORTS FUND

Tranche 1:  FSF wants to invest initially £12.8M in the form of new shares (approximately 14,936 at £857) that would give them a 29.9% stake in the resulting company, increasing it's book value to over £42M.  For this to happen, there has to be a vote by existing shareholders (at a new EGM?), 75% of whom must approve the deal. 

The concern amongst existing shareholders (primarily Paul Gregg) is that this will dilute his holding in Everton, and limit the power he can exercise.  By our calculation, he and his immediate family members currently command 23.3% of Everton shares (see below); so, with a strategic alliance, it would be relatively easy for him to garner more than the 25% needed to defeat any motion for the issuance of new shares required to make the FSF deal a reality.  We understand that Paul Gregg is reportedly of the opinion that the FSF deal is thus "dead in the water"...

If Tranche 1 had gone ahead, the total number of Everton Shares would have risen to around 50,000, with the additional investment boosting the value of the company in such a way that the individual value of shares (and therefore the share price) should not be adversely affected.  The power balance would shift, however, with Kenwright's 25% slipping to 17.5%, the Gregg family to 16.3%, and so on.  The minor shareholders would represent only 11.1%.

Tranche 2: FSF then wanted to invest another £17M a year or so down the road, in the form of more new shares (approximately 20,164 at £857) that would give them overall a 50.1% stake in the resulting company, increasing it's book value to over £60M.  There would presumably have needed to be another vote by existing shareholders, 75% of whom must approve the deal. 

If Tranche 2 had followed, the total number of Everton Shares would likely have risen to around 70,100, with the additional investment boosting the value of the company in such a way that the individual value of shares (and therefore the share price) would not be adversely affected (we are still working on Bill's quoted figure of £857).  The power balance would have suffered another seismic shift, with Kenwright slipping to 12.5%, the Gregg family to 11.6%, and so on.  The minor shareholders would have represented a paltry 7.9%.  Hardly the direction of a Supporters Trust...

Thankfully, Paul Greg was right; and the Fortress Sports Fund fiasco was dead in the water, with no more embarrassing question for "life-long Evertonians Christopher Samuleson about such mundane things as the name of the bloke who scored the winning goal in the 1966 FA Cup Final....
 

RECENT SHARE HISTORY

For our ToffeeWeb readers, we have collated an approximate history of recent Everton share prices and related activity. 

December 2004:  With the voluntary liquidation of True Blue Holdings, the individual holdings of their 22,031,351 shares were converted directly to Everton Shares resulting in the following breakdown of EFC Ownership:   

Immediately after the 2004 AGM, Anita Gregg was appointed to the Everton Board of Directors.

May 2004:  With the departures of Carter, Tamlin and Abercromby from the Everton Board of Directors, the direct shareholding in EFC at Board level is reduced to around 2%; however, the remaining three directors (Kenwright, Gregg and Woods) hold 75% of shares in TBH (or more, if you add in shares controlled by other members of the Gregg family — see above), giving the individual Board members collectively the equivalent of around 55% control in EFC. 

2003:  With Everton's stock increasing under David Moyes, despite the bubble in football finance finally bursting, Everton shares are changing hands privately for between £1,500 and £2,000.

2002:  If you know the right contacts, you can get a share in Everton for under £1,500, but the number of shares held outside the Board / TBH hovers around 5,500, or just 15%. 

2001:  With stability finally assured, share prices creep back up to around £1,250.

2000:  A deal is finally struck, at a remarkable share price of just £857, which enables the Kenwright consortium of True Blue Holdings to buy 24,986 EFC Shares establishing a 70% controlling interest in the Club for a 'mere' £20M, sending Agent Johnson packing... albeit with a very tidy profit!  The control of TBH is a whole other issue, the holding company having issued 22,031,351 shares nominally valued at £1 each, distributed as follows: 
 

1999:  A period of profound uncertainty sees the real value of the shares drop to around £1,000 as no-one seems interested in taking on the floundering monster that is Everton FC.  

1998:  The prices sinks further to £2,500 amid rumours of financial problems for Johnson, who is seeking to sell up his interest in a rapidly falling market.

1997:  Share prices soften to around £3,000, with serious concerns being raised about Everton's long-term viability in the cut-throat Premiership.

1996:  Peter Johnson orchestrated a substantial rights issue of 25,000 £500 shares in September, increasing the number of shares to 30,000.  A further 5,000 shares were issued at the peak of the Premiership moneyfest, with shares supposedly changing hands for as much as £4,000.  At the peak, Johnson sells 17% of his holding, netting perhaps as much as £20M and reducing his stake to 68%.

1995:  There was a stock-split in 1995, the 5,000 shares worth nominally £4,000 each.

1994:  There were just 2,500 shares in EFC, and they changed hands (rarely!) for around £8,000 each, giving the club a nominal book value of £20M.  Lifelong Liverpool fan Peter Johnson bought 50% of them for around £10M to take control of the Club.  Johnson then bought a further 375 shares from John Moores Jr, giving him an unassailable 85% controlling interest, but the share price dropped as low as £5,000.

NEW SHARE ISSUE?

Many Everton fans would like to invest in Everton FC Co Ltd but the availability and current elevated price of shares (in private transactions) is a limiting factor.  Also, a share issue could bring in much-needed cash to fund key initiatives such as the new Academy and training centre at Halewood (currently stalled); establishment of a trust for the David France Collection, and perhaps even money towards a new or improved stadium?. 

However, it is quite clear that there will be no share issue for ordinary Everton fans unless and until the current Board of Directors see a way of it making them money (eg, through partial flotation, etc) as they won't risk the dilution of their current share ownership that would come with a stock split.  The club could use the extra money but the Directors may not want to voluntarily reduce their own personal worth (if this is indeed a risk), especially as Everton's stock value is perhaps rising once again under David Moyes.

In the current climate of world football recession, and with the next TV deal unlikely to match the existing one, the Everton Board members will be hard pressed to see the value of their investment maintained, never mind make gains, if they were to allow a share issue for the fans. While many fans believe this is what is needed to boost the coffers, the economic imperatives of the people who hold the reigns of power within the club force them to view the question of a new share issue somewhat differently...

Things changed, albeit briefly, following the dismal 2003-04 season, when Everton contrived to survive relegation with their smallest ever points total recorded at Goodison Park, followed by the meltdown at Board level as Paul Gregg faced off against Bill Kenwright to get TBH dissolved and allow further investment in the Club — including a £15M rights issue to be bought up by the fans. 

But the latest promise is investment from Christopher Samuleson's Fortress Sports Fund would give them a 29.9% stake in the resulting company, increasing it's book value to over £42M.  This would take the Club in the opposite direction of increased ownership by the fans.

Michael Kenrick
24 December 2005