Alisher Usmanov: The Nightmare Remains
By Tom Dunmore • Feb 22nd, 2008 • Category: News & Notes • 7 responsesAlisher Usmanov, the shady Uzbeki billionaire whose lawyers once threatened to sue this very site, has been steadily building his share in Arsenal in recent months. He has now creeped over 24%, and is just 5.8% short of the required 30% to launch a takeover bid. The board currently has a lockdown agreement preventing sale of their shares until April 2009, but with 18% of shares owned by small holders, there’s plenty of leverage Usmanov can keep buying up to pressure the board.
This has prompted Arsenal’s Managing Director, Keith Edelman, to again warn Usmanov off from a takeover attempt, though he accepted they may eventually have to invite him onto the board.
“[Usmanov’s share purchase] has no impact on the business because the Board is totally agreed to a lockdown, no selling of shares, so the Board as a total entity is the largest shareholder with 45 per cent. That makes us bullet-proof.
“There are many examples of clubs who have been taken over and are not having as smooth a ride as first hoped for.
“Arsène [Wenger] has always said a board where there is no conflict or tensions helps the team because they are not distracted. It is important we continue that, we want there to be calm waters.”
The Arsenal Supporters’ Trust seems set to add their 3% share to the lockdown as well, with fans having been on the main opposed to Usmanov since news broke of his past, which included a six year prison stretch. F
ans of other teams Usmanov looked into buying, including their North London rivals Tottenham, should be glad they don’t have this grotesque bogeyman trying to muscle his way in.
Tom Dunmore is the editor of Pitch Invasion.
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i feel for arsenal fans, and concerned followers of the premier league. usmanov is trouble.
but is it all so surprising? if you are a company, you can be bought.
More interesting is whether he gets to 25.01%; this means any change to the memorandum and articles of the club (needed to change the rules regarding shares, issues of new shares etc) need his approval. Any defensive move to say have a rights issue to dilute his holding (by restricting it to ST holders, for example) would need his approval.
Not surprisingly, Dave has got it in one.
I haven’t read the Arsenal Memorandum and Articles of Association (I do have standards, you know), but the standard provision in English law Articles is for extraordinary resolutions such as those Dave outlines (also things like change of purpose, merger, winding up, etc.) to require the approval of 75% of the shareholders. The purpose of those provisions is to protect minority shareholders from being oppressed by the majority, but in this case they would operate to give Usmanov a veto over a series of defensive measures that the Arsenal board might want to implement (and we all know how much they like defence (sorry the League Cup Final run-up has my Tottenham juices flowing).
The Board is right that a takeover is impractical as long as the lockdown holds, but it seems to me that Usmanov is doing is pursuing a strategy that will allow him to pounce as soon as there are any fissures in the resolve of the Board group, while at the same time increasing the value to the Board of ultimately buying him out at a premium in order to be rid of the noxious Uzbek (a well-established strategy we call “greenmail”).
BTW, one legalistic point of clarification. He doesn’t need 30 percent to launch a takeover bid; he could do that today. Instead, he would be required to launch a bid were he to reach that level.
According to Borat Sagdiyev anyone from Uzbekistan is an “asshole”.
What is in Usmanov’s past and why was he in prison? Surely he must be better than the former Thai dicator over at ManCity.
Micah, the depth of Usmanov’s alleged criminality is pretty severe. Here’s Tom Wise speaking in the European Parliament about him.
When the news broke about Usmanov’s interest in Arsenal, former British Ambassador to Uzbekistan Craig Murray revealed on his website Usmanov’s past, including his six year stretch in prison. It’s still legally difficult to repeat his allegations here as I don’t want to deal with Usmanov’s hounds, Schillings, again.
You see, when bloggers such as myself linked to and repeated Murray’s claims, Usmanov threatened to sue us. He eventually forced Murray’s website offline by threatening to sue his webhost. Usmanov refused to challenge Murray directly himself, despite the latter actually calling Schillings and inviting them to take him to court. Unfortunately for Usmanov, his lawyers managed to get the webhost to pull the plug on a number of other prominent websites as collateral damage, including that of Mayoral candidate Boris Johnson.
This led to a huge media storm and debate about free speech. Schillings were essentially trying to bully bloggers without the resources to fight legally to remove the information from the internet without actually challenging the information by suing Murray.
Murray’s original article on Usmanov, essential reading for the answer to your question, is available here.
Wow. Thanks for the info, Tom. The article link is broken but I will gladly take your word. I am curious, though, as to how Usmanov’s lawyers would actually have grounds to sue Pitch Invasion.
Sorry, the link above will work now.
Legally they had no case really, but I can hardly afford to fight high-priced London lawyers with no means myself. That’s their strategy and why they went after bloggers and the webhosts rather than Murray himself, who wanted to go to court. That law firm is particularly well known for such aggressive and underhand tactics.