City greets Aston Villa stock market launch with enthusiasm by City

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City institutions have given an enthusiastic reception to Aston Villa's stock market launch. A placing of 1.36 million shares in Birmingham's only Premier League club at pounds 11 each had been "very, very well received" said Chris Hawkley of sponsoring brokers Albert E Sharp.

Mr Hawkley expects the institutional placing to be oversubscribed three times. The terms give the business, including pounds 30m worth of freehold stadia and training grounds, a stock market tag of pounds 126m.

Doug Ellis, chairman of Villa, predicted the parallel public offering of 454,545 shares also at pounds 11 a share, aimed at Villa players, staff and fans, could be oversubscribed five or six times. The public offering is for a minimum of 40 shares at a cost of pounds 440.

Mr Ellis, who rescued the club from a financial crisis in the late Sixties and whose family will retain a 38 per cent stake in the company, claimed the City's enthusiasm was prompted by the financial strength of the business and its conservative management approach.

"This is a business that has been run as a business, not as a fantasy," Mr Ellis said. "We at Aston Villa have possibly the best balance sheet you could find among Premiership football clubs."

The club's strategy, he said, was based on funding the purchase of players and their wages entirely out of operating profits. The club was debt- free though it had a pounds 10m overdraft facility. The flotation will raise around pounds 15m of new money, enough to fund plans to raise the Villa Park stadium's capacity from 40,000 to 50,000.

Dealings in the Villa shares are expected to start on 7 May.

People & Business, page 25