Investment Proposal FAQs
FAQs regarding the proposed investment from Tony Bloom
Why does Tony Bloom want to invest in Hearts?
This opportunity has not come around by accident. Tony Bloom has done his due diligence (as has the club) and he has recognised both the importance of Heart of Midlothian Football Club and its significant potential. His past and ongoing successes with Brighton & Hove Albion in England and Royale Union Saint-Gilloise in Belgium are there for all to see, and with Hearts, he sees the chance to play a part in another success story. He believes Hearts can disrupt Scottish football, and he wants to be a part of a new glorious chapter in Hearts’ history.
What does Tony Bloom get for his investment?
Tony Bloom will acquire 29% of the total issued share capital in the club. It is important to note that the shares he will acquire are non-voting shares. This means that nothing changes in terms of FOH’s voting rights in the club.
FOH will retain its 75.5% of the voting rights in the club - so absolutely nothing will change in that regard.
Tony will be entitled to appoint a representative to be a director on the club’s board but will not appoint himself as a director. As such, he will not be involved in the day-to-day running of the club. It goes without saying, however, that having the benefit of Tony’s experience, and the football and business world related experience of those around him, available to the club will be invaluable.
What is the difference between the shares FOH holds and the shares Tony Bloom will hold?
FOH and the other existing shareholders in the club hold ordinary shares which have voting rights attached to them.
Alongside these voting ordinary shares, the club will create a new class of ordinary shares which have no voting rights attaching to them. These non-voting ordinary shares will be issued to Tony Bloom in exchange for his capital investment in the club.
Both classes of shares – ordinary voting and ordinary non-voting - will each be worth the same in monetary terms.
The only difference between the two is that one carries voting rights while the other does not.
Will Hearts become part of a ‘multi-club system’?
No. This proposed investment is being made by Tony Bloom on a personal basis as an individual. Although Tony Bloom does have ownership interests in three other football clubs he has never sought to tie those clubs together in a “multi-club system”. The transaction has also been structured carefully to ensure that it remains compliant with football regulations relating to multi-club ownership.
Will Hearts become a feeder club to either Brighton & Hove Albion or Royale Union Saint-Gilloise?
No. This is a personal investment by Tony Bloom. Tony Bloom invested in Royale Union Saint-Gilloise in 2018 and Royale Union Saint-Gilloise has not become a feeder club for Brighton & Hove Albion. Hearts will remain a proudly independent club and neither Brighton & Hove Albion nor Royale Union Saint-Gilloise will become a “parent club” to Hearts.
What will the investment be spent on?
Put simply, to take the club forward into a new era. On the pitch, there will be investment in the first-team playing squad through the assistance provided by the Jamestown Analytics model. Off the pitch, the investment will help to futureproof a sustainable business model, one which reduces the reliance on external benefactors and maximises our earning potential.
What happens after the consultation process?
The club has been working diligently in the background to reach all required milestones. Following completion of this consultation on May 26th, should a majority acceptance be reached, then the relevant paperwork will be finalised and the club will hold an Extraordinary General Meeting to officially approve the investment.
Will there be any changes in the dynamics between the club and FOH?
FOH and the club will undertake a review of the Working Together Agreement to ensure it is fit for purpose for the next phase of our development.
Who currently owns the issued non-voting share capital in the club?
There are no existing non-voting shares in the capital of the club – the only shares which currently exist are ordinary shares which all carry voting rights. A new class of non-voting ordinary shares will be created and will be issued to Tony Bloom in exchange for his investment.
There was no impediment to Tony Bloom receiving ordinary shares with full voting shares, the same type of shares that FOH and other exiting shareholders currently hold. Tony Bloom recognised the sensitivity relating to the voting control at the club and understood and accepted that by opting to receive non-voting shares he would leave voting power at the club firmly in the hands of FOH and its members.
What changes for these non-voting share owners if the proposal goes ahead?
There are no existing holders of non-voting ordinary shares – this is a new class of share which will be created to allow the club to issue these to Tony Bloom in return for his investment.
Will the Tony Bloom appointed director seat on the board be a new position created in addition to the existing board structure or will it be an existing “seat” with someone leaving the board to make way the new position?
The existing directors on the club board will remain the same and Tony Bloom will nominate his representative to be a director on the club board in addition to those existing directors.
How many shares exist currently in each category of shares? i.e. Ordinary non-voting shares and ordinary voting shares?
There are currently 156,478,232 ordinary voting shares issued in the capital of the club of which FOH holds 75.5% of the issued ordinary voting shares in the capital of the club (118,207,017 ordinary shares). The remaining shares are held by BidCo 1874 (Limited) (17.4%) and approximately 8,000 fan shareholders (7.1%). Note that FOH’s exact percentage has previously been incorrectly reported as being 75.1%.
The non-voting ordinary shares do not yet exist – this is a new class of share which will be created as part of the transaction in order for the required number of non-voting ordinary shares to be issued to Tony Bloom in exchange for his investment, such that he will hold 29% of the entire issued share capital in the club (i.e. the entire issued share capital includes ordinary and non-voting shares). Accordingly, FOH’s controlling voting rights of 75.5% ordinary voting shares will not be diluted in any way.
Current Position:
|
Shareholder |
Percentage holding of Ordinary Shares and voting rights |
|
Foundation of Hearts Limited |
75.5% |
|
BidCo (1874) Limited |
17.4% |
|
Fan Shareholders |
7.1% |
Post Transaction:
|
Shareholder |
Percentage holding of voting rights (unchanged) |
Percentage of economic interest in the Company |
|
75.5% |
53.6% |
|
|
BidCo (1874) Limited |
17.4% |
12.4% |
|
Fan Shareholders |
7.1% |
5.0% |
|
The Investor (Tony Bloom) |
0.0% |
29.0% |
Currently the Foundation's shareholding sits at 75.5%. If the investment proceeds, what will be the percentage of shares that the Foundation will subsequently hold?
FOH will continue to hold 75.5% of the ordinary voting shares in the club – given that Tony Bloom is not being awarded any voting rights, there will be no change to the level of FOH’s voting control in the club. FOH’s economic shareholding in the club post transaction will be 53.6%. Tony Bloom will hold a 29% economic shareholding but will hold 0% of the voting rights.
If this is below 51%, will the fact that the Foundation retains 75.5% of voting shares mean that they will be able to defeat any proposal that the shares it doesn't own be sold?
Tony Bloom will be restricted from selling his shares for a period of two years from the date of his investment – during that two year period, a majority of the existing shareholders in the club would need to approve any proposal for Tony Bloom to sell his shares. After that two-year period, if Tony Bloom wishes to sell his shares, he must first offer those shares to any other existing shareholder who holds more than 10% of the shares in the club.
Is it possible to see the detailed proposal from Tony Bloom?
For reasons of commercial confidentiality it is not possible to share the detailed proposal. However, the main terms of the deal have been shared with FOH members and your Board has been transparent as to any potential impacts on FOH’s voting control of the club – there are none – FOH will remain the 75.5% controlling shareholder in the club.
If Tony Bloom decides to sell the shares will this include a seat on the board?
Provided he holds 10% or more of the issued share capital of the company, Tony Bloom’s shareholding carries the right for him to have a nominated representative on the board of the club. If Tony Bloom transfers his shares to permitted persons such as a family member, a family trust or a company which is under his or his family’s ownership and control, then the transferee will have a right to appoint a representative director provided they hold 10% or more of the issued shares in the club. If Tony Bloom’s shares are transferred to any other third party (not a permitted person) then there is no right to appoint a representative director whether or not the 10% threshold is met.
Will Tony Bloom receive any money from player trading generated by JTA?
No. All revenue from player trading will be retained by the club. To be clear, JTA’s role is to advise the club on player recruitment and trading but the ultimate decision and all economic benefits related to that are retained by the club.
Will Tony Bloom’s person on the board have a vote in the boardroom?
Yes – the individual nominated by Tony Bloom to sit on the club’s board will have a vote the same as each of the club’s existing directors. The appointed director will have no special power on the board.
Who will be Tony Bloom’s person on the board?
This will be up to Tony Bloom to nominate a person he thinks is best placed to sit on the club’s board. When the investment has been completed and Tony has nominated his representative director, FOH members will be made aware. Any board member appointed by Tony Bloom must comply with the requirements of the SFA rules.
NOTE: The terms of the investment remain subject to entry by the club into legally binding documentation and SFA approval, together with other normal course regulatory requirements. The answers set out above have been prepared according to the latest terms negotiated with Tony Bloom.
Why should FOH members vote in favour of the proposal?
You made the club survive, now you have the opportunity to help it thrive.