An excellent find from one of the Internet Bampots tonight.
Thanks to John Bradshaw for steering this my way.
Dave King’s stalling tactics, his mindless and stupid game of chicken with the Takeover Panel, is going to end up costing him, upon compliance, in excess of £1 million more than it would have when he was instructed to make the offer in the first place.
This is a remarkable fact and is to say nothing for what he’s paid in lawyers’ fees to basically lose every round of this fight, and what he faces having to pay when the Takeover Panel issues sanctions for his non-compliance thus far.
The extra £1 million will have to be found due to changes in the exchange rate between the Rand and the Pound. When King was instructed to make the offer, in February this year, the exchange rate between the two was 16.22 Rand to the Pound.
The current exchange rate is 18.12 Rand.
King said he would obtain the shares via a dividend from MicroMega, his South African firm. That dividend was paid in April and was worth 217,604,049 Rand. At the time of the Takeover Panel ruling that would have been worth £13,400,000. By the time of King’s offer it was worth £13,099,000. By the time the dividend was paid its worth had fallen again to £12,648,000. The offer was due to be met and formally made on 26 April, when the dividend would have been worth £12,610,000.
But King stalled even further.
The value of the dividend is now worth £12,000,000.
On top of that, the South African government levies a 20% tax on dividends; that means King’s MicroMega money is now worth just £9,000,000. The total sum needed to satisfy the 20p offer is £10.7 million and that means that he’s delayed so long he can no longer afford to pay for the share offer with the MicroMega money.
And it gets even worse than that; King has blamed the delays on South African exchange controls, which in his case will probably see an additional sum required. Estimates now put the total sum King will have to find at £12.8 million or thereabouts.
Frankly, King is a danger to himself.
His club has already had to borrow £3 million to halt legal action from Mike Ashley; that was dressed up as a win until the facts emerged in their annual report. God alone knows what King has spent fighting the Takeover Panel to a series of embarrassing defeats. This case has been running almost the whole time he’s been at Ibrox and it was all over after the Takeover Panel refused his appeal on their initial charge.
The Scottish media has maintained that King has fought “every step of the way”, but since the Takeover Panel appellate board rejected him what he’s actually been doing is defying the explicit orders of a City of London regulatory body.
The numerous court cases were not, as the press has sometimes said, appeals; they were actually enforcement hearings to get King to comply, and when the Court of Session ordered him to in February that should have been that.
From that point on King has been openly pissing in the faces of the courts.
That was never going to end well.
King forgets sometimes that he’s not the only one with deep pockets.
He underestimated the depth of Mike Ashley’s and the Sports Direct boss’s loathing for him, but this is a graver mistake by far. He appears to have completely overlooked the fact – which he should have remembered from South Africa – that the state has almost limitless resources and will keep coming after him until it brings him to his knees.
That’s coming, but only if he doesn’t stumble over his own shoelaces first.