Premiership strugglers to seek listings

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The Independent Online
Sunderland and Southampton yesterday became the latest football clubs to sign up for a stock market listing, but the pair of Premiership strugglers will command vastly different price tags.

Southampton, languishing third from bottom, is merging with Secure Retirement, a quoted property development and healthcare company, which began life providing sheltered housing for the elderly.

The reverse takeover, which gives Southampton a full Stock Exchange listing, values the south coast club at slightly more than pounds 10m.

That is significantly lower than the pounds 47.4m Sunderland, 15th in the Premier League, is valued at under the terms of a placing and offer of shares at 585p. Fans will have to pay at least pounds 585 to become shareholders.

Guy Askham, chairman of Southampton, said the difference in valuation was partly due to the more conservative treatment his club used when accounting for players' transfer fees.

The reverse takeover will see Secure relisted as Southampton Leisure Holdings and provide the football club with instant access to about pounds 6m of fresh capital. "Secure is bringing to the table cash, assets, access to stock market funds and proven business skills," said Mr Askham. "We have great ambitions for this club and this deal will play a very important part in achieving them."

Mr Askham declined to say if the new money would be spent on boosting manager Graeme Souness's squad. But he confirmed plans for Southampton to relocate from their home at The Dell to a 73-acre site to the north of the city that will include a leisure complex. The complex could cost up to pounds 40m to build and is unlikely to be ready before the turn of the century.

Outside London, Southampton is the only Premier League club south of Birmingham and the only top-flight team in the Meridian television area. It has spent the last 18 years in the top flight, but has fought an almost annual battle against relegation.

Sunderland is also in the process of moving ground, though it plans to use the proceeds from the float, expected to be around pounds 10.7m, to improve the club's finances and release extra money for manager Peter Reid to make some big-name signings. Of the 2.05 million new shares Sunderland is issuing, 16 per cent will be available to employees and the public. Dealings are expected to begin on Christmas Eve.