The Danger Within

By: Bill Osborne
Date: 19/12/2005

IN my article yesterday regarding the Fenty proposal, I made the following statement; "The securement of 51% of the shares by Mr Fenty does not present any additional dangers to those that already exist."

A number of people are asking what existing dangers I am referring to.

I am referring to the current share issue which is 600,000 shares of which 345,150 have been issued. There remains 254,850 shares that are unsold which represents 43% of the total share issue.

Hypothetically it is possible therefore that a group could each purchase shares without any person in the group exceeding 29% of the total share issue and hiding the fact that they are acting in concert. This would give them the opportunity to purchase a few more shares privately that would give them a 51% holding without ever having to make a formal takeover bid.

They could then strip the club of its assets.

At the moment, that would not be a profitable exercise due to Blundell Park being used as a guarantee for the bank overdraft and insufficient assets to make it worthwhile. But if Mr Fenty continues to support the club financially, that situation could change and the group would be in a position to fulfil their purpose leaving with Fenty's money and our club.

Of course, that is only a hypothetical scenario, and one might be right in saying it is almost outside the realm of possibilities.

But before you say that, you might like to know that two and possibly three of our fellow league clubs are in that exact position and they too thought it was outside the realms of possibilities.

As long as the 43% of the shares remain unissued, there will always exist a possibility of exploitation by unscrupulous persons. Look at the number of league clubs that are fighting desperately to rid themselves of the people in control.

There are currently about a dozen clubs in that position and another four where the fraud squad are involved and another two where charges have already been laid.

Football clubs are an easy mark for con men with false promises and a great number have fallen prey to them.

I personally feel that Grimsby Town would not be profitable enough for anyone to take the trouble and I would not want to suggest otherwise. But give us a couple of successful years and promotions and a few more quids coming in and we could well be a desirable target.

Of course the greatest danger is that the shareholders will not grant Mr Fenty's proposal and he will depart or, at least, cease his financial support and that frightens me.

Even more frightening are comments from some shareholders that they will not support the application. But that is their right. So too is the right for them to fantasise that some rich white knight will step in to replace Mr Fenty.

That too is possible. But I live in the real world.

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