EGM FAQs
Heart of Midlothian plc General Meeting – 18 June 2025
FAQ’s
1. Why do the New Articles create a new class of shares?
Tony Bloom has agreed that the shares he acquires will carry no right to vote. Other than having no right to vote, the new class of Non-Voting Shares will otherwise have the same rights as the existing Ordinary Shares. The Club’s existing articles of association do not provide for Non-Voting Shares (on the basis that none currently exist). The New Articles will therefore create such a new class and define the rights attaching to those shares.
2. Why has the maximum number of Club directors been increased?
In exchange for his investment, the Club has agreed that Tony Bloom shall be entitled to appoint one individual to the Club’s board of directors for so long as he continues to hold a 10% equity stake in the Club. Given that there will be an additional board member, the New Articles also increase, by one, the maximum number of individuals who can be appointed to the Club’s board. For the avoidance of doubt, there is no change to the necessary quorum requirements for Board meetings.
3. Do any restrictions apply if Tony Bloom wishes to transfer his shares?
Yes – if Tony Bloom wishes to transfer his shares, the New Articles state that, before transferring to an external third-party, he must first offer those shares to any existing shareholder who owns more than 10% of the share capital of the Club. Note that, in addition, Tony Bloom has also agreed not to transfer his shares (other than to a Permitted Transferee – see below) for a period of 2 years unless a majority of the Ordinary Shareholders provide their consent.
4. Do any restrictions apply if the Club wishes to issue more shares?
UK company law states that, generally, unless disapplied by a special resolution, when a company issues new shares for cash, all existing ordinary shareholders have a right to purchase a proportion of those new shares, on the same or more favourable terms, pro rata to the existing equity stake held by them. The New Articles contain a provision which confirms that Tony Bloom’s prior written consent would be required in order for such pre-emption rights to be waived (for so long as Tony Bloom continues to hold a 25% equity stake). This has been included to ensure that Tony Bloom has the benefit of these rights (in the same way as the ordinary shareholders) – this is necessary because Tony has agreed to forego voting rights and therefore could otherwise have his rights disapplied without his consent.
5. What are the Permitted Transfer provisions and why does Tony Bloom have the benefit of these?
The New Articles contain a customary ‘Permitted Transfers’ provision which allows Tony Bloom to transfer his shares to a family member, family trust or corporate entity wholly owned by him and/or his family without having to first having to comply with certain other restrictions which would otherwise apply to him transferring his shares. This is a common provision which is included to ensure that, if an investor needs to rearrange his affairs for family estate planning or other reasons, they can do so without first having to navigate the restrictions which otherwise apply to shares transferred by the investor.
6. Why do all share transfers now have to comply with Football Regulations?
The New Articles now recognise the fact that any transfer of the Club’s shares must be compliant with Football Regulations – meaning, primarily, the regulations of the Scottish FA, the SPFL, UEFA and FIFA. Previously, the Club’s shares were readily transferable under the Articles notwithstanding any provision to the contrary in the Football Regulations, but such transfers could have resulted in a breach of such regulations by the transferee and/or the Club. Accordingly, this change embeds that requirement in the New Articles. This is an important to protect the Club (and individual shareholders) from being sanctioned by a football regulatory body.
7. What are the anti-dilution rights and why have these been awarded to Tony Bloom?
· As noted in the Club’s latest accounts and as discussed at the AGM, in 2024, the Club’s principal benefactor provided a long-term 10-year loan facility to the Club. That loan facility includes a mechanism whereby, instead of repaying the loan in cash, if both the Club and the benefactor agree, the loan can instead be repaid by converting the amount owed into non-voting shares in the Club – this a common mechanism used in lending arrangements of this nature.
· If the Club and the benefactor agree to repay the loan in that way (note that this would only ever take place in 10 years’ time or more), Tony Bloom will be entitled to be issued with such number of additional Non-Voting Shares as is necessary in order to ensure that his 29% equity stake is not inadvertently diluted by the issue of shares to the benefactor. To be clear, the Anti-Dilution Rights only apply in respect of the benefactor loan facility and only entitle Tony Bloom to maintain a 29% non-voting stake as opposed to, for example, providing him with the right to increase his stake.
· Note that the shares which could be issued to the benefactor and the shares which would in turn then be issued to Tony Bloom, would only ever be more of the same non-voting shares as are being issued now to Tony Bloom. This means that, in any event, the existing shareholders’ voting rights would remain unaffected and FOH’s controlling shareholding of 75.5% of the voting rights in the Club would not be impacted. Any such share issue would require the approval of FOH as the Club’s majority shareholder.
· Given his deep football industry experience and expertise, the Club considers its to be important that Tony Bloom maintains a meaningful equity stake in the Club – it was therefore agreed that his stake shouldn’t be diluted by any arrangements relating to the long-term loan facility which existed prior to him investing in the Club.
8. What are all the other more minor changes in the New Articles?
The Board is also taking the opportunity to make some additional minor or technical amendments. These changes generally reflect modern best practice and may assist in relieving certain administrative burdens on the Club.
9. Why do the general meeting resolutions refer to shares with a nominal value of £6,391,364.40 being issued?
This refers to the nominal (or par) value of the shares of that Tony Bloom is subscribing for – this is essentially the face value of the shares. Each share in the Club has a nominal value of 10p and, in order for Tony Bloom to achieve a 29% stake he will receive 63,913,644 shares of 10p each (i.e. an aggregate nominal value of £6,391,364.40). That being said, in this case, Tony Bloom has agreed to pay a premium on the shares he is acquiring meaning that, instead of simply paying nominal value for the shares, he has agreed to pay £9.86m for those shares in full on completion of the investment.