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Mike Ashley £200m Scheme Set To Be Derailed

6 years ago
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While Newcastle fans feel powerless to influence Mike Ashley’s handling of Newcastle United, elsewhere the tycoon isn’t getting his own way by any stretch of the imagination.

Having already been rebuffed a number of times by minority shareholders at Sports Direct, it now looks almost certain that Ashley will be blocked again despite owning the majority of the company.

The latest deal proposes that 25m shares, currently worth around £200m but pretty much guaranteed to be worth much much more when cashed in, would be allocated to 3,000 staff including Ashley.

However, the Telegraph are reporting that they understand that almost half the shareholders eligible to vote (Ashley can’t as he would be a beneficiary of the proposal) have already made clear they will vote against the plan at the shareholders meeting on July 2.

The newspaper have named major minority shareholders such as the National Association of Pension Funds, RPMI RailPen (The railways pension scheme) and Royal London Asset Management, as amongst those who will stand up to Ashley.

After Ashley’s last scheme being blocked, where he would have pocketed around £70m, a meeting was arranged between leading shareholders and the SD Chairman and another Director, the intention being as to how to resolve the problems of Ashley getting what he sees as his just rewards for what he gives Sports Direct.

At that meeting the SD Directors assured the shareholders that the company would listen to investors as to future proposals and would ensure limits as to what certain individuals would receive, but this seems to have fallen by the wayside.

Robert Hingley, director of investment affairs at the ABI (Association Of British Insurers) saying;

“With no criteria at all as to allocation, or criteria of allocation or individual limits, this scheme is a real problem.”

In other words, it would appear this £200m+ scheme is trying to be pushed through with no clarity on just how much certain individuals will benefit from it, and exactly what proportion of those £200m of shares would go to Mike Ashley.

Last time Ashley was blocked he instantly sold £200m worth of Sports Direct shares which temporarily led to millions being wiped off the share price due to the uncertainty.

With everything Ashley perceives he gives SD, including a fortune in free advertising/profile via Newcastle United, just what will be his next move to hit back at the pesky shareholders that are blocking him?

How about something really radical such as Sports Direct actually paying for the vast benefits they get from Newcastle United promoting their company and all the other brands.

Even better, what about backdating it for the last seven years?

Maybe then, Newcastle might actually buy the players who are desperately needed to avoid a relegation fight this coming season, instead of relying on free transfers and players from the Spanish second division.

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