Leeds United's recent Companies House activity explained after fresh San Francisco 49ers investment - YEP 11/11/21
Leeds United's recent Companies House activity is entirely in keeping with the club's fresh investment, says football finance expert Kieran Maguire.
By Joe Urquhart
49ers Enterprises, an investment arm of NFL giants the San
Francisco 49ers, recently upped their stake in the Whites to 44 per cent.
The American franchise first invested in the Elland Road
outfit in 2018 with an initial purchasing of 15 per cent, before upping their
investment and control in January of this year to a further 37 per cent.
Paraag Marathe, president of 49ers Enterprises, was
announced as the club's vice-chairman and has now become involved in the day to
day running of operations in LS11 over the last 11 months.
Chairman Andrea Radrizzani continues to maintain a majority
shareholding of Leeds through Aser Ventures with 56 per cent ownership but has
welcomed added investment following promotion to the Premier League.
This week, the statement of capital following the transfer
of shares was confirmed on Companies House after the recent increased
investment by 49ers Enterprises, which was officially announced last week via
the club's website.
Busy morning at Companies House for Leeds United. Looks as if club is changing its constitution in relation to the transfer of shares between investors #LUFC pic.twitter.com/o4TgMvMX1t
— Price Of Football (@KieranMaguire) November 11, 2021
There were also a number of resolutions submitted in the
aftermath: resolution of allotment of securities, resolution of removal of
pre-emption rights, resolution of varying share rights or name, resolution of
adoption of articles of association.
The further activity sparked questions from supporters about
what it meant for the club overall. This, though, is entirely in keeping with
the recent movement at board level in West Yorkshire and also occurred in early
February, when the last investment was officially processed in paperwork form.
"It happens every time there is a big investment.
There's nothing to be worried about at all," Price of Football podcast
presenter Maguire explained to the Yorkshire Evening Post.
"It's very common practice and I see a lot of clubs
getting new investment and this is one of the things that happens in terms of
tweaking the constitution, giving shareholders rights, changing some of the
existing rights and also what happens if you want to sell.
"It's legal rather than finance. It's all to do with
the rights of the shareholders and the ability they have to sell their shares.
“If you, or I, owned 50 per cent of a company and I was
thinking of selling, under many constitutions if I received an offer for the
shares I’d then have to say to my fellow investors that I’ve had an offer, but
you have first refusal.
"Otherwise, you could end up in a partnership with
someone you don't like, that is the standard approach. Sometimes those rules
change when companies get bigger."
In a statement last week, Leeds CEO Angus Kinnear revealed
he was “delighted to see Aser and 49ers Enterprises strengthen their
partnership" following the recent sale of more shares to the club's
American partners.
Radrizzani has openly discussed wanting to turn the Whites
into a European heavyweight once again alongside his wish of owning a number of
clubs across the world, much like City Football Group - the owners of current
Premier League champions Manchester City,
"We had Paraag on the show [Price of Football] a few
months ago. He seemed very bullish about the club's prospects overall,"
Maguire said of the continued increased investment from 49ers Enterprises.
"Now that they [the 49ers] are involved with the club
on a day to day basis through board representation he must have fed that back
to San Francisco.
"They clearly like what is happening at Leeds and
therefore they want to increase the investment, as you would do for any company
in which you have a positive view.