Change in company status sought to allow investment The Board of Aberdeen Football Club is seeking approval from shareholders to become a private limited company with the intention of securing further investment.

A circular is being issued to all shareholders today (Friday, June 7) outlining the reasons for changing from a public limited company to a private limited company. A vote on the proposal will be taken at a General Meeting 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.”

The Board of AFC considers that this investment is necessary to meet the ambition and strategic objectives of the Club, both on and off the pitch. These include the successful delivery of the development at Kingsford which comprises two phases: the new professional and youth academy football training facilities and the community sports hub to be operated by Aberdeen FC Community Trust, and phase two: the new stadium.

Mr 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 9 of the City Code on Takeovers and Mergers. Rule 9 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.

Mr Milne explained: “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 Board believes these 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 Circular sets out at length the relevant background, the detailed proposals, the consequences of the loss of protections provided by the City Code on Takeovers and Mergers, and the Board’s recommendation, and shareholders are encouraged to read it carefully.