Aston Villa joins rush to float on Stock Exchange
Friday 07 February 1997
Villa will raise between pounds 15m and pounds 20m through a share placing and offer on the main market. The money will be used to improve the Trinity Road end of Villa Park, the club's 39,400-seat stadium, and to provide manager Brian Little with cash to strengthen his squad of players.
No decision has been taken on whether Doug Ellis, the Villa chairman, will sell any shares at flotation. Mr Ellis, nicknamed "Deadly Doug" for his habit of sacking managers, paid just pounds 425,000 to buy control of the club in 1982. His holding, worth up to pounds 65.8m at flotation, has since been diluted down to 47 per cent.
"We must ensure we have every opportunity open to us to compete with the best in Europe, both on and off the field," Mr Ellis said. "Our 8,000 shareholders will also benefit from a more liquid market in our shares." Villa's shares are currently traded on a matched-bargain basis on the Ofex market.
Mr Little, who recently signed a five-year contract reportedly worth pounds 2m, will be eligible to take part in an employee share option scheme.
Villa, winners of the European Cup in 1982, lie seventh in the Premiership. In the year to May 1996 Villa made a profit before interest and transfers of pounds 5.8m and spent the same amount again, in net terms, on new players. Turnover of pounds 18.8m, versus pounds 13.0m a year earlier, was helped by the team's success in winning the Coca-Cola Cup.
Meanwhile, Mark Hughes and Craig Burley became the latest Chelsea players to invest in their club as pounds 1.7m was raised through a placing of shares.
Chelsea raised pounds 5.5m in separate share placings in January. Further share issues threaten to dilute the estate of the late Matthew Harding, the former vice-chairman, from 27 per cent currently to below the 25 per cent needed to block special shareholder resolutions.
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