David Low, who attempted to buy Hibernian last year, has today outlined to fans his suspicions about the true motives of the club as it seeks to move towards a supporter ownership model. Here is his statement in full:
Since Hibernian FC ("Hibernian" or "the club") published its report and accounts for the year to 31 July 2014 and announced its intention to issue new shares I have been approached by a large number of shareholders and supporters and asked to increase the offer my group made last year and to offer to buy all of the new shares Hibernian is proposing to issue.
I have considered the financial statements to 31 July 2014 and reviewed the Information Memorandum provided by the Board and my valuation of the club's shares has not changed.
It remains my view that Hibernian's assets remain overvalued at pre-recession and banking crisis levels. The bank debt has now been replaced by a new large debt to the controlling shareholder and these facts together with the poor financial performance of the business over many years mean Hibernian's shares continue to have a negligible economic value. Consequently, my group will not be making a new offer, subscribing for new shares or making a donation.
If the controlling shareholder wishes to value its investment at £7.5m that is its prerogative and its decision has to be both respected and accepted as does my own valuation.
However, what is less acceptable is the Board's deliberate decision to avoid providing thousands of existing and prospective shareholders and donors with any up to date financial information to help them make their own decision on the merits of an investment or a donation. It is not unreasonable to want to know what you are being asked to invest in or donate to. It is still not too late for the Board to provide that information as the share offer will remain open until 31 August 2015 (or such other date as the Board may decide).
The Board really should address the following issues:-
1. No financial information has been provided in respect of current trading. This is particularly relevant given the published accounts relate to when the club was in the Premier League. Given the club has subsequently been relegated the Board should immediately release a current trading update and publish six month figures to 31 January 2015 as soon as is practical. There are thousands of existing and prospective shareholders and donors who would like to know how the club's doing.
2. The published accounts to 31 July 2014 casually announced the outsourcing of the club's retail operation. Why was the business outsourced, who was it outsourced to and on what terms was it outsourced? There are thousands of existing and prospective shareholders and donors who would like to know.
3. The published accounts provide detailed information on the club's loan arrangements with its bank. No information was been provided in respect of the new loan arrangements with the new lender. Who, exactly, is the loan is with, what are the loan terms and who now has security over the club's assets. There are thousands of existing and prospective shareholders and donors who would like to know.
4. The club's existing Articles of Association enable the Board to restrict and control who owns shares in the future. It is not unusual for shareholders' personal circumstances to change thereby necessitating a sale of shares. There are thousands of existing and prospective shareholders and donors who would like to know why the Board has not referred to or addressed this matter.
It would be both constructive and helpful to all if these matters were addressed posthaste.
In my opinion, the most likely outcome of the share issue is that supporters will end up with a minority shareholding in the club. My group's offer involved donating 25% of the issued shares to a supporters' charitable body and I invite the controlling shareholder to now consider doing the same.
For the avoidance of doubt, these are my personal views and any supporter considering investing in Hibernian shares should seek the advice of a financial advisor authorised by the FCA.
Pax Vobiscum et Serva Fidem
David Low
22 January 2015
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