Paul Barry Share Purchase

This morning we posted an open letter from Paul Barry which explained his motivation behind the proposal to become the 100% owner of Cambridge United.

The statement below has been issued by the Board to explain how the process to achieve this will work. Ultimately this is a decision in the hands of shareholders but in the spirit of openness it was thought appropriate to share this with all fans:

  • The offer from Paul Barry which the Board has recommended to shareholders is conditional on being able to deliver 100% ownership to Paul Barry. 
  • For historical reasons, the Club has a very large number of small shareholders (circa 700).  Arranging the transfer of 700+ different shareholdings through private arrangements between Paul Barry and the relevant shareholder would be prohibitively time consuming and costly.
  • Also, the Club does not have up to date contact details for all shareholders and therefore arranging individual transfers of all the shares would be very difficult.
  • Therefore the Club is proposing that Paul Barry will purchase the shares belonging to smaller minority shareholders (being shareholders with less than 1,000,000 shares) via a share consolidation. 
  • Pursuant to this proposal, the Club will consolidate most of its ordinary share capital on a 1,000,000-to-1 basis.  
  • What this means is as follows:  If a shareholder holds less than 1,000,000 shares, following the consolidation they will be entitled to less than one consolidated share and so will no longer be able to be a shareholder once the consolidation becomes effective. 
  • The directors will be authorised to add together the fractions of shares to which such shareholders would be entitled following the consolidation into whole consolidated shares. These whole consolidated shares will be sold to Paul Barry.
  • The Club will distribute the proceeds of sale arising from the sale of the consolidated shares (that arise as a result of the added together fractions) to the former shareholders so that each former shareholder will receive 2p for each ordinary share that they held before the consolidation. Shareholders will all receive the payment that they are entitled to.
  • In order to implement the share consolidation, the Club will send a letter to all current shareholders which will be accompanied by a written resolution.
  • That letter will ask current shareholders to sign the written resolution to signify their agreement to the proposals. This written resolution will need to be signed by holders of at least 75% of the Club’s issued shares for the consolidation to become effective. 
  • It is expected that the circular will be sent to the Club’s shareholders on or around Thursday 29.8.2019.
  • As a result of the consolidation, there will be a smaller number of larger shares in issue. These larger shares will be held by the Club’s larger shareholders, each of whom will be asked to agree to sell their shares to Paul Barry directly.  The consolidation will not become effective unless each of these larger shareholders has agreed to sell their larger shares to Paul Barry.
  • As a result of the consolidation and in the event of the sales of the larger shares by the larger shareholders, Paul Barry will acquire 100% ownership of all of the Club’s shares.
  • There is no need for the Club to call a meeting of its shareholders, it is possible for these proposals to be implemented using the written resolution procedure summarised above.
  • Assuming the written resolution is signed by the requisite majority of shareholders, the consolidation will be effective from the date which will be specified in the written resolution.  This date is expected to be on or around 6.9.2019.
  • There are some additional, purely technical, aspects to the consolidation. For example, in advance of the consolidation, some shares will be re-designated as a different class of shares (so as to be excluded from the effect of the consolidation) so that the consolidation results in a whole number of issued shares and does not leave a remainder.  There will be further details on these technical aspects in the Shareholder circular.

The Board recommends this offer to shareholders as a way of providing a stable financial structure for the Club.