No Pain, No Gain: Man Utd's small shareholders need to face reality

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The Independent Online

Manchester United and Jennings Brothers have little in common. One is a world famous football club, while the other is a little, local brewery. Yet in recent times these old-established companies have been the subjects of controversial takeover bids with their small shareholders staging determined rearguard actions to try to prevent the predators eventually achieving complete ownership.

In each case, the sheer might of the bidders eventually swept aside the opposition. And the victors are now mopping up the outstanding shares, many of them held by despairing shareholders who ignored the cash on offer, hoping against hope they would be able to retain their holdings. For these shareholders, fighting to the end, the money is an irrelevance - they want to stay, largely for emotional reasons, on the share register.

The Glazer family has more than 90 per cent of the Man U shares it targeted with its 300p-a-share offer; Wolverhampton & Dudley Breweries has topped the 90-per-cent mark with its 430p-a-share Jennings bid. They can, therefore, forcibly buy out the dissenters. But any shareholder still savouring the prospect of holding out should reconsider. There really is no point in being out in the cold.

I tried it once. Long ago, a quoted garage-company in which I held shares fell to what I regarded as a cheapskate offer. I was so incensed that I still held on even though the bidder obtained more than 90 per cent and, as it was entitled, compulsorily acquired all the outstanding shares.

My shares were then shunted into some form of trust. I was in limbo, cut off from the bidder and the company in which I had held shares. Like Man U and Jennings my garage company delisted: no dividends and, of course, no quotation. After about 10 years I saw sense and accepted the terms I had earlier refused.

Resistance from Man U and Jennings shareholders had much to commend it. In this soccer-crazy country, many of the football club's fans and shareholders did not relish the prospect of it going under US control. They felt it was a retrograde step and feared for Man U's future. At Jennings there was a strong body of opinion opposed to yet another small regional brewer which was making traditional English bitter losing its independence (TD Ridley is another casualty, falling to a bid this week).

I did not have shares in Man U but, as a Jennings shareholder, I was happy to ignore the Wolves offer, hoping the bid would fall short of control or a substantial minority shareholding would be left to keep an eye on the new men in charge. But, once Wolves reached 82.5 per cent, it was clear to me that it would top the 90-per-cent mark - and so, reluctantly, I accepted.

If I have no quarrel with a takeover and the price is right then I have no compunction about quick acceptance. But if I do not like an offer or the terms are mean I often, just to be bloody awkward, decide to wait until the compulsory letter arrives, invariably by recorded mail.

I have, over a long career of investing, ended up with a number of unquoted shares. My football club is Brentford. I was among many shareholders who rejected a takeover bid, quite generously priced, from the football entrepreneur Ron Noades. He, unlike the Glazer family, was prepared to settle for an effective controlling stake.

The hard-up Bees - big loans have to be sorted out soon - do not enjoy a presence on any share market. It does not worry shareholders. They are club supporters, like those Man U die-hards, and not interested in selling.

Still there are a number of offbeat markets for unquoted shares. For example JP Jenkins, the firm that used to run Ofex, operates the JPJL facility and the stockbroker James Sharp & Co conducts a similar but smaller operation.

Shares of Gale & Co, a family-controlled brewer famed for its HSB bitter, are traded on both markets. I have been a Gale shareholder since the 1970s. The shares - the company has a two-tier capital structure - are riding at new highs. I have no wish to sell.

However, I feel I may have come a cropper with another de-listed company, Corus, a hotel chain. After being forced to accept a bid I - and some others - switched convertible loan stock into shares. So we got through the compulsory barrier and the Malaysian bidders had to settle for 99.99-per-cent ownership. But the company has performed poorly. Last year it suffered a near-£5m loss. Yet I have turned down two unacceptable offers - one at a really silly price - for my small stake as, on balance, I still feel it is worth hanging on.

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