Share transfer leaves 'Toon army' in the cold

Thousands of Newcastle United fans have missed out on their club's stock market flotation after its share issue was heavily over-subscribed by both institutional investors and season ticket-holders.

The flotation, which raises pounds 50m to repay debts and fund a youth development policy, will also trigger bonuses for three Newcastle directors totalling more than pounds 1m.

Disappointment for some 14,000 members of the so-called "Toon army" came as the Tyneside club revealed that chairman Sir John Hall had transferred control of his family's stake to his son Douglas.

A supplementary flotation prospectus showed that Douglas Hall will control 57 per cent of the club when shares start trading on 2 April. With the club valued at pounds 193m, that stake will be worth pounds 111m.

Mr Hall is an executive director of the club while Sir John does not have a seat on the board, even though he has bankrolled the club's renaissance and will remain chairman of the football club

Newcastle United's chief executive Mark Corbidge denied the share transfer had been prompted by institutional pressure. He said Sir John had decided to make the transfer last week on his 64th birthday. "Nobody here or in the City has suggested that any share transfer should take place," Mr Corbidge said. "It is a matter for the family."

Newcastle's shares were priced at a top-of-the range 135p valuing the club at pounds 193m. The retail offer was seven times over-subscribed, prompting the club to increase the retail proportion from 10 per cent to 15 per cent of the shares. Demand from the "Toon Army" was so strong that the share allocation had to be restricted to season ticket-holders and employees.

No shares will be allocated to other members of the public. Season ticket- holders will be entitled to 370 shares each, worth pounds 500.

Mr Corbidge said demand for the shares from City institutions had been "fabulous", giving the club a "blue chip" shareholder base thought to include Mercury Asset Management and Abbey National.

Under the terms of the flotation, Cameron Hall Developments, Sir John's property company, has agreed to pay pounds 300,000 to Mr Corbidge, pounds 750,000 to Freddie Fletcher, joint chief executive and pounds 100,000 to Josephine Dixon, finance director.

The Stock Exchange may now consider creating a stand-alone football classification of the stock market. Under Stock Exchange rules an industry grouping has to account for at least 0.5 per cent of the value of the FT All-Share Index.