Well, well, well. Swerved in time after all, Mr King.
Last night, King announced on the Sevco website that he was, in the end, backing down and submitting an offer for the rest of the shares in Sevco, in accordance with the Takeover Panel ruling. So, here we go then folks, we’re going another round with this eejit.
What is going on over there?
On the same day they leave it until the final moment to submit half yearly accounts – unaudited ones, again – King has decided to come forward with the Takeover Panel offer. So much for all the people who said that we were inventing deadlines where there were none, that we were making it up as we went along.
I guess we just got lucky with our dates, right?
That’s kind of beside the point though; let me ask that question once again; what is going on over there? What kind of game is this guy playing now?
It’s not Chicken, as I pointed out last night. Because in that game if neither side blinks then both are destroyed. In this game, only King is destroyed if he maintains his crazy course. But if he knows that, if he knows that the end result is humiliation and surrender to the inevitable, what’s the point in playing these things out like this in the first place?
What was the endgame if not this? And if he knew this was the endgame what was the point in it all? What was the point in court cases and appeals and banging his head against the wall? Does he like conflict? Does he mix it up just because he can?
When I heard the news that King had decided to comply my first thought was not of a game of Chicken but of watching someone hopelessly out of his depth at the card table. I use poker analogies a lot on here; bear with me for a second whilst I use another.
The best type of poker is no limit Texas Holdem; in that game, the simplest and yet deadliest of the poker variants, each player gets two cards. Betting then takes place in rounds; after the first round of bets three “community cards” are turned up in the middle of the table, face up, for any and all players to use, with their own two cards. This is called the Flop. Another round of betting follows. A fourth “community card” called the River card, is turned up and placed in the middle. Another round of betting follows, and a fifth and final “community card”, called the Turn card, is placed face up in the middle. There is a last round of betting.
Each player who’s left then has the cards in their hand plus the five in the middle to make the best possible five card hand. The winner takes it all.
There’s a poker term that refers to the way King is playing; he’s going “on tilt.” Which means that he’s letting emotion affect how he plays. He’s lost the plot. He wants to seem more than he is, he wants to bluff up on every hand, even when doing so is rank lunacy. And good players around him can scent blood because they know he’s full of shit.
King never had a winning hand here, not at any point. Like a bad player hanging onto rags he seemed almost like he was waiting for a run of lucky cards. He raised or called each time, and every time he did he put more money on the table, throwing the good after bad hoping, it seems to me, for nothing but dumb luck.
It is daft enough to do that before the Flop when you are holding nothing … but for the Flop to produce a mish-mash of cards of immodest worth, of different suits, and to then continue playing as if he was holding twin Aces, that is foolishness of the purest kind. To stay in the game after the River has failed to deliver a miracle is madness and nobody holding nothing makes another bet after the Turn unless they are crazy or shooting for the moon.
Whatever King’s little drama was about, it has likely cost him near enough £1 million already in legal fees and such like. What he announced last night was an intent to make an offer; where is the share prospectus? Where is the independent financial analysis? Those things will cost him more money. On top of that, as I’ll discuss later, Jack Walker announced in the press this morning that his own clients, the Easdale’s, are highly likely to accept the 20p per share.
He offered this scorching assessment, just for good measure; “Nobody with the slightest financial acumen thinks the shares are worth 27 or even 20p. That’s why many shareholders are tempted to bite King’s hand off.”
And that leaves King a problem, as I’ll write about in due course.
Once again, King has skated right up to the edge of a major showdown which he would not have won only to pivot away on time. I thought he was too late yesterday; it may well be that he was, because all we have is an “intention” to make an offer, but a lot of the necessary framework of that offer hasn’t been put in place yet and Walker is sceptical and others are too. We’ll see if the Takeover Panel and the City of London regulators are satisfied with the small print.
But even if King has done enough to satisfy them, there is trouble coming down the pipe.
With this guy, there always is.
In announcing his intention to comply with the court yesterday – even as he manoeuvres for time to avoid actually doing so – he issued an ominous warning that he intends to conduct a “strategic review” of how the club is run.
Be very afraid Sevco fans, for that can only mean one thing. The days of even daring to dream are almost at an end. He’s talking like a man who is preparing to wield the scalpel and draw blood. Because the upshot of all this is that if enough people accept the 20p offer, King himself will end up the majority shareholder and chairman … and that means the other directors can safely disentangle themselves from further funding requirements.
It means that it all falls on him, and any Sevco fan who really believes this guy has the cash to bootstrap their ambitions, or that he would, hasn’t been paying attention. The source of the funds for this alleged offer seem to be coming from the dividends paid by the company he controls, MicroMega. His daughter is one of the largest shareholders; this is literally the family silver he’s raiding here, but only because he doesn’t believe that the shareholders will bite. But enough of them will. Enough to put the keys firmly in his hands.
And that is the last thing the absentee chairman wants. Mark my words, his talk about a strategic review is bad news. He knows that the club will not satisfy UEFA FFP at the moment. He knows that sooner or later they will be forced to spend only what they earn … and with his own personal wealth now on the line, I strongly suspect he’ll try to slam the brakes on the spending.
Which leaves only one way to fund the team above and beyond what normally comes in through the gate.
Sevco fans, prepare for your next using. It’s coming.
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