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Fellow Shareholder

 

We write to offer our thanks to those shareholders that have supported our petition to convene an extraordinary General Meeting of Everton Football Club. We also wish to provide you with an update to the events that have occurred since we originally sought your support to petition the club for an EGM.

 

As you will no doubt be aware, the Destination Kirkby proposals have been ‘called in’ by government office and the resulting public enquiry is scheduled to commence on the 18th November 2008 meaning that the decision to confirm whether or not the scheme will proceed is unlikely to be known until July 2009. The club has previously stated that a delay of 12 months could seriously undermine the viability of the proposals due to increased construction costs and we believe that it is of the utmost importance that the club take this opportunity to review the situation, free itself of the constraining exclusivity arrangement and consider other potential alternatives as of course there is no guarantee that a protracted and detailed examination of the Kirkby proposals will lead to the scheme being approved by the Secretary of State.

 

Both Tony and I met with our new acting CEO Mr Robert Elstone on the 14th August to discuss the protocol to be observed on the night of the EGM. Mr Elstone has stated that the purpose of the EGM will be strictly related to the stadium issue as set out in our petition and that questions from the floor in relation to other concerning issues such as investment, transfers and the like will be out of bounds on the night. We would urge shareholders to heed this demand as it has been indicated to us that the Chairman is within his rights to cut short the EGM should it stray from the purpose of the meeting. Mr Elstone has acknowledged that the stadium relocation issue has been divisive and has generated much passion on both sides of debate however it has been stressed that the Chairman will cut short the meeting should it become unruly or abusive. We would remind shareholders that the purpose of the meeting is to determine if relocating to Kirkby will be in the best long term interest of Everton FC and as such we would request that shareholders remain respectful of the Chairman, the board and their advisors as they respond to our questions.

 

In light of the above, we are concerned to report that we have been advised that the board will not give shareholders the opportunity to endorse the Kirkby proposals on the night with a traditional ‘show of hands’ vote but will rather go straight to a poll vote. For the record, the Articles of Association of the Everton Football Club Company Limited state

 

“A resolution put to the vote of a meeting shall be decided on a show of hands unless before, or on the declaration of the result of the show of hands a poll is duly demanded.”

 

A poll vote would ensure that should Mr Kenwright, Mr Earl and Mr Woods wish to continue with the Destination Kirkby proposals they will be able to do so regardless of the wishes of the 1,500 or so minority shareholders. We find this stance somewhat surprising as one would think that the board would be confident that shareholders will be appreciative of the merits of the Destination Kirkby proposals and its benefits to the long term prosperity of the club and endorse the boards proposals. We believe that the board, whilst demanding respect from the floor, should equally consider the wishes of minority shareholders who wish to safeguard the best interests of Everton Football Club. We believe that it is important that the board take this opportunity to listen to the concerns of shareholders and Evertonians who are not convinced about the wisdom of the Destination Kirkby proposals now that the facts are known. We would remind the board that Evertonians were furnished with few facts during the original ballot process and the club promised Evertonians a ‘world class’ and ‘effectively free’ stadium. It is clear that the board will fail to deliver on these promises and subsequent independent surveys have concluded that the Evertonian community would not have endorsed the Destination Kirkby proposals had they known what we know today. We believe that Destination Kirkby is a risky venture that will present Everton Football Club with a very uncertain future. Evertonians want what is best for the long term success of the club and as such if the scheme was genuinely the best possible solution to the stadium issue it would attain unanimous support, unfortunately the Destination Kirkby proposals have divided not united the fan base.

 

A further development that has occurred since we submitted our EGM petition to the club on the 18th July 2008 has been the sudden resignation of Keith Wyness shortly before the ‘call in’ was announced. A number of articles have appeared in the media linking Mr Wyness’ departure ( http://www.timesonline.co.uk/tol/sport/foo...icle4467155.ece ) to the growing behind the scenes influence of retail tycoon Sir Philip Green. Further articles ( http://www.guardian.co.uk/business/2008/aug/03/everton ) suggest that Everton Football Club will be sold if the Destination Kirkby proposals are approved. Both Tony and I are concerned that these reports suggest that the board are pursuing the Kirkby proposals in order to enhance the short term value of the club prior to a sale. Indeed Section 8.6 of the ‘Proposed Stadium For EFC’ report by DppLLp state that

“The Directors of the Club recognise the need to strengthen the balance sheet in the short term”

 

We would also advise that we have been in negotiation with the club concerning the wording of the resolution to be put to the vote at the end of the EGM. Our original intention was to request that a fresh ballot be put to Evertonians based upon the known facts in relation to the Destination Kirkby scheme however this proposal was declined by Mr Elstone. We are disappointed that the board have declined this request citing that Evertonians have already been consulted on the matter; however we would point out to Mr Elstone and the board that the information provided by the club at the time of the ballot did not, in our view, reflect the reality of the Destination Kirkby scheme. Having discussed the matter through our solicitors we believe that we are now close to agreement with the board and it is hoped that the resolution to be put forward for a vote at the end of the evening will be worded as such:

 

“In the best interests of the Everton Football Club the shareholders of the company request that the board extricate the club from the exclusivity agreement with Tesco followed by the immediate withdrawal from the Destination Kirkby scheme and forthwith commence negotiations with Liverpool City Council to ensure that the club can redevelop Goodison Park or relocate to a central location of the clubs choice within the city of Liverpool.”

 

We trust that the board will not reject this proposal and will afford shareholders the opportunity to have a show of hands on this resolution.

 

Finally, the Chairman and the Board, when requesting order and respect at the EGM, must remember, as one Goodison official recently proclaimed, “respect is a two way street.” It is hoped that the board will not use their authority to dismiss the concerns and wishes of minority shareholders. The club has recently promoted the notion that Everton FC is the ‘Peoples Club’ and as such should give Evertonians the opportunity to endorse or reject the Destination Kirkby proposals now that further facts have come to light..

 

Should the board fail to reconsider their current position and offer a ‘show of hands’ vote to shareholders on the night of the EGM we have taken this opportunity to enclose a further petition calling for another EGM to debate the specific off field affairs of the club. Should you wish to support us we would request that you complete the attached requisition form and present it to either Tony or myself on the night of the EGM or alternatively email a scanned copy of the requisition to mark{dot}grayson{at} hotmail{dot}co{dot}uk or post your signed copy to:

 

Mark Grayson c/o PO Box 118, Aigburth, Liverpool, L17 6WX.

 

Once again, thank you for your support. Mark Grayson and Tony Bennett, August 2008

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