Newcastle's Sir John Hall to sell 11% stake in club at big discount

Click to follow
The Independent Online

Sir John Hall, the former chairman of Newcastle United and its single biggest shareholder, plans to sell off an 11.4 per cent stake in the football club for £4.5m.

Newcastle United is buying back the shares at a significant discount to the current price from Sir John who will then immediately loan the club half of the cash he receives.

It is thought Sir John is keen to extract money out of Newcastle United since his property development company, Cameron Hall Developments, has hit tough times.

Sir John is selling 16.6 million shares in Newcastle United, equivalent to an 11.4 per cent stake, for £4.5m - or 27.1p a share. That is a discount of 21 per cent to Friday's closing share price.

He will then loan Newcastle United £2.25m - a sum that is repayable by the club on the first anniversary of completion of the buy-back by Newcastle United.

The move is likely to go some way to appeasing those in the City who have long held concerns over the size of his stake and the corresponding power it has given him.

Sir John, who originally bought the club in 1989 before floating it on the stock market at 135p a share eight years later, stepped down as chairman more than four years ago.

His son Douglas, who was famously caught in a Spanish brothel ridiculing fans and calling Newcastle women "dogs", remains on the board as a non-executive director. Douglas, who also mocked the team's players, is an executive director of the Gibraltar-based Newcastle United Football Club International. There had been some speculation that he was keen to take the business private.

Before the share transactions can go ahead, Newcastle United must get approval for the buy-back from its other shareholders at an extraordinary general meeting - a meeting which must take place within two months.

Sir John and Copia Holdings, a company that houses some of Sir John's shares, have agreed not to sell or deal in the shares before that happens.

After the deals have gone through, Sir John and his family will be left with a stake in Newcastle United of 41.1 per cent - down from the current 47.9 per cent they own.

Sir John is understood to have agreed to such a discount on the disposal since trading in the stock is so illiquid.

Placing such a large chunk of shares with an institution would also have been hard since investors remain disenchanted with football stocks.

The move did not surprise some close to Sir John since the troubles of his property business have long been known.

Accounts lodged with Companies House last year showed Cameron Hall Developments made a total operating loss of £90m in the year to November 2000.