Aberdeen FC has called a general meeting for next month so shareholders can vote on transferring the club to private limited company status.
The Dons board want to change from a public limited company so they can attract £2million in further investment by way of a share issue. Shareholders will vote on the proposal on Tuesday, July 2.
Club chairman Stewart Milne said: “This change will facilitate investment in the club by way of share subscription. This will allow a currently proposed investment of £2million to proceed and increase our ability to attract further investment in the future.”
Milne insists the investment is necessary for the club’s strategic objectives which include the development of the football academy, community sports hub and new stadium at Kingsford.
Milne said: “Share subscription has played a key part in raising funds for phase one and, along with other initiatives, will continue to play a big part in fundraising for the new stadium.”
As a public limited company, AFC is subject to rule nine of the City Code on Takeovers and Mergers. Rule nine states that anyone who, together with associates, has shares which carry 30% or more of the voting rights in a public company has to make an offer to acquire all of the company’s issued equity shares.
Some of the proposed investors are unwilling to proceed while this rule applies because they do not wish to be forced to make an offer for the entire equity share capital of AFC.
Milne said: “As a private limited company, this rule will no longer apply, immediately unlocking £2million of investment. This will close the fundraising for phase one and allow the training facilities and community sports hub to be completed this autumn.
“Our ability to raise further funds by share subscription for phase two will be significantly enhanced by becoming a private limited company. It is the intention that both existing and new shareholders will be able to participate in the phase two share subscription.”
The Dons board believes the changes are in the best interests of the club and its shareholders and is unanimously recommending shareholders to vote in favour of the resolutions proposed at the general meeting.
The board has contacted shareholders to set out at length the relevant background, detailed proposals and the consequences of the loss of protections provided by the City Code on Takeovers and Mergers.