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ENIC to sell Spurs?

By Danny Griffiths
Date: 9/1/2004

DANIEL LEVY may be ready to sell ENIC's controlling interest in Tottenham at the start of next season. A report in today's Daily Telegrpah suggests...

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ENIC to sell Spurs?
By Danny Griffiths for THEspursweb.com

DANIEL LEVY may be ready to sell ENIC's controlling interest in Tottenham at the start of next season.

A report in today's Daily Telegrpah suggests the share issue currently being underwritten by the controlling interest at the club, and aimed at raising substantial cash to buy new players, could also be a ploy to make Spurs attractive to new owners.

The report states: 'Where Levy has undoubtedly been astute is the way he is raising £15 million to fund the January spending. While his plan will provide Tottenham with money it also means his company, ENIC, could end up with a majority of shares at much less than the present market price. (Just the reverse of Tottenham's record in buying and selling players.)

Tottenham shareholders who own 2,500 shares or more are being asked to pay £250 for a convertible redeemable preference share. They will receive no interest until Oct 31 2007. After that, they can get one per cent above the Bank of England base rate or they can convert the share into 1,562 ordinary shares - which means the shareholders will have paid 16p per share when the market price is 27p. This is where the cleverness of Levy, who gained a first-class honours degree in economics and land economy at Cambridge, comes in.

In March 2001, when Levy's company, ENIC, bought 29.9 per cent of Tottenham from Sugar, they paid 80p a share. Now Levy is not offering a traditional rights issue - where shareholders can sell their rights or buy more - only ENIC can do that. ENIC are also acting as underwriters for the convertible redeemable preference share issue but will not charge their usual fee of about £250,000.

If, as is likely, the vast majority of Tottenham shareholders do not take up these shares by the Jan 19 deadline, ENIC will step in and buy them up and the £15 million will have been raised. They will therefore have put money into Tottenham but since ENIC will have, in effect, paid only 16p per share for the new shares, this will reduce the average cost of their shares to approximately 33p.

As already revealed in The Daily Telegraph last summer, Levy brushed aside a tentative approach from Roman Abramovich, the owner of Chelsea, by pricing the shares at £1.50. Now, with his average cost likely to come down dramatically, Levy can afford to sell at about 40p should another Russian billionaire come looking to buy the club.
Although sources close to Levy insist he has no desire to sell, I would watch out for action in September.

Should Levy sell Tottenham before then, he must share some of the profit with the former shareholders of ENIC as part of the deal that took the company private a year ago - although this does not extend to any shares he may acquire as a result of the new share offer.

The problem for Levy is that if, by Sept 2004, Tottenham are in the Nationwide League, there may not be many buyers. Levy says he will not let the club be relegated and, in the last week - rattled by the club's slide into the bottom three - he has sought advice from clubs who have recently been relegated from the Premiership.

They have told him to buy early in the January transfer window and not wait for Jan 31 - when the window closes - to pick up the best bargains.
Tottenham fans will hope he shows the same cleverness in buying players that he has done in his share dealing.'
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