Wycombe Wanderers Football Club PLC recently
published annual accounts for the 11 month period ending 30th
June 2005.
Wycombe Wanderers Founders Trusts and Wycombe Wanderers Supporters
Trust canvassed members on how they wish the Trusts' shareholdings
to be voted.
The PLC's AGM has been cancelled. The Trusts understand that the
AGM will be re-called in early 2006.
Hence the Trusts will need to canvass our members again on whatever
new resolutions are placed before shareholders.
Nevertheless, the current exercise has been usefull as it has
established the process by which the Trusts can canvass members.
A total of 85 members of the Founders Trust voted together with
94 members of the Supporters Trust.
The votes cast for each resolution are shown in the table - a
description of each resolution and the advise provided by the
Trusts' Boards is given below.
On the basis of the votes cast, had the PLC AGM gone ahead, the
Trusts would have cast their votes in respect of their shareholdings
FOR resolutions 1, 2 and 3 and AGAINST resolution 4.
The Supporters Trust holds 100,000 Ordinary Shares in the PLC.
The Founders Trust holds 77 Founder Shares in the PLC (as at 14th
November 2005).
Democracy only works well if people are engaged and, therefore,
the Trusts' Boards wish to thank all the Trust members who provided
mandates.
| Number of responses from Founders Trust members only |
31 |
| Number of responses from Supporters Trust members only |
39 |
| Number of responses from members of both Trusts |
56 |
| Total number of responses received |
126 |
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| Total Replies 87 | Total Replies 95 | |||||||
| Resolution |
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| 1 |
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| 2 |
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| 3 |
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| 4 |
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Resolution 1:
To adopt the directors' report and accounts for the period ended
30th June 2005
The accounts have been audited and are likely to be accurate,
notwithstanding the poor financial performance.
The Trusts' Boards advise shareholders to vote for receiving
the accounts.
Resolution 2: To re-appoint BDO Stoy Hayward as auditors.
BDO Stoy Hayward are a reputable firm of accountants.
The Trusts' Boards advise shareholders to vote for re-appointing
BDO Stoy Hayward as auditors.
Resolution 3: To give the directors power to allot shares.
The rules that govern the running of a company such as the PLC
are contained in two documents, known as the Memorandum and Articles
of Association.
The Articles of Association can be viewed via the link below.
The Trusts' Boards and the PLC's directors were under the impression
that the PLC directors already had the right to issue shares -
see clauses 7.1 - 7.4 on page 9 of the Articles of Association.
The Trusts' Boards have discussed this matter with the PLC and
have learnt that the PLC's current legal advisors have told the
directors that the existing clauses 7.1 - 7.4 are inappropriately
worded and they need the words in Resolution 3 to be appropriately
empowered.
Without taking potentially expensive legal advice on the details
of the Companies Act 1985 and its amendments, it is impossible
for the Trusts' Boards to have an independent view on the exact
wording.
Nevertheless, given the level of losses, it is better that the
Club reduces its reliance on debt financing and hence the directors
should be allowed to allot those shares that are currently authorised
but not yet issued.
The Trusts' Boards advise shareholders to vote for giving
the directors power to allot shares.
Resolution 4: To dis-apply pre-emption rights.
This is the resolution that in the opinion of the Trusts' Boards
is both inappropriate and unnecessary.
If this resolution is passed in its current form then it will
give the directors the power to allocate up to 2,000,000 shares
to new shareholders without first offering them to existing shareholders.
This power would exist until the next AGM of the PLC i.e. probably
approximately 12 months.
As stated under our response to Resolution 3, the Trusts' Boards
believe that it is better that the Club reduces its reliance on
debt financing and hence are supportive of the directors selling
additional shares.
It is, however, an important cornerstone of corporate governance
that pre-emption rights do apply i.e. that the existing shareholders
of an entity should be offered first any new shares that are to
be issued.
This is the right that protects shareholders against shares being
sold to outside investors too cheaply.
This is why dis-applying pre-emption rights is inappropriate.
Whilst there is no evidence that the intention of the current
directors is to sell shares too cheaply to outside investors,
the Trusts' Boards have not been given any compelling reason to
recommend deviating from the principle of retaining pre-emption
rights.
Dis-applying pre-emption rights is also unnecessary because it
remains possible for the directors to sell additional shares.
In summary, the mechanism involves the directors first deciding
on the amount of new capital required, then offering the required
number of shares to the existing shareholders and then, only if
the existing shareholders were unwilling or unable to buy all
the shares offered, the balance would be offered to third parties.
Whether or not existing shareholders would choose to buy more
shares is a personal decision for those shareholders but they should be given the option.
The Trusts' Boards advise shareholders to vote AGAINST
disapplying pre-emption rights.
The topic of pre-emption rights may be difficult to understand
for those not familiar with company law and the issuance of shares.
The topic has recently been studied in some depth by Paul Myners
on behalf of the Department for Trade and Industry (DTI).
A link to the DTI report dated February 2005 can be found below.
Whilst not everything in this report applies to the situation
at Wycombe Wanderers Football Club PLC, Paul Myners concludes
on Page 7 that:
"A shareholder's right to pre-emption is a valuable one.
I agree with all those who see it as a cornerstone of UK company
law and UK capital markets which should not be removed or eroded"
We hope that you find the information above instructive and the
comments and advice both thoughful and helpful.
If you are not a member of BOTH the Supporters and Founders Trusts
then please join BOTH (subject to eligibility).
This is the best way to stay well informed about this and future
debates at the Club and to ensure that your voice is heard on
matters important to the future of the Club.
Application and eligibility details can be found via the links
below.
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Download
the notice of the 2005 Annual General Meeting Includes the four resolutions to be voted upon as an Adobe Acrobat file Right click on mouse button and select Save Target As ... to download the document |
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Download
the Addition to the Chairman's Statement Presents resolutions 3 and 4 in English and explains the directors reasoning behind them as an Adobe Acrobat file Right click on mouse button and select Save Target As ... to download the document |
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Download
the Form of Proxy as an Adobe Acrobat file Right click on mouse button and select Save Target As ... to download the document |
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Download
the Annual Report and Financial Statements as an Adobe Acrobat file ** Beware this is a very large 14.2 MB file ** Right click on mouse button and select Save Target As ... to download the document |
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Download
the note correcting an error on Page 19 of the Annual Report as an Adobe Acrobat file Right click on mouse button and select Save Target As ... to download the document |
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PLC Articles of Association |
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DTI Report on Pre-emption Rights |
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***
Join the Supporters Trust *** Click here for link to application details |
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Founders
Trust The Board of Wycombe Wanderers Supporters Trust urges everyone who is eligible to join Wycombe Wanderers Founders Trust in addition to joining the Supporters Trust - see here for links between the two Trusts |
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The latest news on the Supporters Trust |
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Information page on the Supporters Trust |
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Supporters Trust Home Page |