The Fenty Proposal

By: Bill Osborne
Date: 18/12/2005

I have always been opposed to the idea that one person should hold a controlling interest in Grimsby Town Football Club or any club for that matter.

The English Leagues are strewn with the remnants of what were once successful clubs that allowed control to fall into the wrong hands.

Despite the introduction of the 'right and proper persons' rules, there is only one safe method to prevent unscrupulous persons from gaining overall control and that is the current shareholders insisting on certain conditions and guarantees before voting their approval of the share sales. (That is if the general shareholders hold sufficient shares to do that.)

At Grimsby Town FC, they do.

Currently rule 9 on takeovers and mergers requires a person gaining 30% or more of the shares to make a formal offer to all other shareholders, unless 75% of the shareholders vote to waive that obligation. Which is exactly what the current chairman, Mr John Fenty, is proposing at the extraordinary meeting of shareholders following the AGM on December 29th.

Under different circumstances, that would be sufficient to start the alarm bells ringing. But these are not normal circumstances and because of the conditions attached to the waiver motion, the securement of 51% of the shares by Mr Fenty does not present any additional dangers to those that already exist.

Mr Fenty and his supporters, already have, by way of their shareholdings, control of the club.

But what Mr Fenty does not have and what the conditions of the waiver prevent, is him and his consorts gaining total control of the club. That is 75% of the shares which would allow him to do almost anything he wants without having to seek the consent of the other shareholders whereas, with only 51% of the shares he would need the consent of the other shareholders to make changes to the constitution and memorandum of articles and other radical changes.

Mr Fenty has previously stood by the same commitment made by previous chairmen Bill Carr and Dudley Ramsden, that they had no desire to ever own the club.

The reason for the change in direction by John Fenty is that he has made some major investments in the club and will continue to do so with the new stadium project and the continuing debt burden the club has, and he needs to protect his current investments and any he will make in the future.

Mr Fenty by his past actions and financial support has clearly demonstrated his commitment to the future success of the club and has proven to be a 'right and proper person.'

Therefore, bearing in mind that Mr Fenty is the only person, in or out of the community, who is prepared to make serious financial commitments to the club, it is in the best interests of the shareholders and the future of the club to allow the proposal to be carried.

If Grimsby Town Football Club is to overcome its present financial problems and continue to survive, it will need financial support and at the present time, Mr Fenty is the only person willing to make serious financial commitments but, like any intelligent investor, he is seeking some protection for his investments.

Although Mr Fenty has not made any statements to this effect, it seems unlikely that he will continue his financial support without the protection he is seeking and who can blame him?

Therefore, it seems that the future of Grimsby Town Football Club, will almost certainly be decided by the shareholders at the EGM on 29th December.

We can only hope that they make the right decision.

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