Hemmings takes control of Preston North End
TREVOR Hemmings has acquired 51% of Preston North End and threatened to withdraw financial support if the remaining shareholders refuse to sell up.
Under the Takeover Code the Lancashire tycoon, who recently sold Blackpool Tower, is now obliged to make a mandatory unconditional offer for the remaining shares.
Shareholders have been warned that failure to accept Hemmings’ offer will leave the 122-year-old club facing insolvency.
The Championship club has long been dependent on Hemmings’ Guild Ventures which held 28% of the club and has loaned it around £13m.
His new vehicle Deepdale PNE Holdings (DPNE) has acquired Guild’s shares along with those owned by the Friends of Preston North End and director Derek Shaw at 5p each. The offer values the AIM-listed club at around £165,000.
This represents a significant discount on the 95p they were last traded at before they were suspended on May 17 after the club was served with a winding up petition by HM Revenue & Customs for unpaid tax. The shares floated at £4 each in 1995.
Today shareholders were told by the club, which made a pre-tax loss of £9.1m last year and has debts of £29.6m, that Hemmings’ offer will allow it to resolve its financial problems and avoid the prospect of insolvency.
Following a financial review the club has concluded that without significant player sales and a reduction in player wages, a further injection of £5m is required to break even and fund the next football season. In addition an overdraft of £5.2m and a bank loan of £1m are due for renewal or refinancing at the end of the month.
In a statement the club said: “In summary, if the offer is not accepted by sufficient PNE shareholders, the financial support of Guild will be withdrawn and no financial support will be provided by DPNE. It is highly unlikely that any of the group’s assets will have any immediate realisable value and the board would have no option but to take steps to place the group into an insolvency procedure.
“A liquidation (or any other form of insolvency procedure) would offer no return to PNE shareholders and would be hugely detrimental to the prospects of the club. Having few tangible assets there would be little value realised on a winding up for the repayment of the group’s creditors.”
An offer document will be published in the next 28 days.
