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Villa For Sale For Less?

Following the sale of the land, do we now assume that we are being sold for £7million less?

It may be good news that the Serpentine land has been sold, despite the fact it has gone far far cheaper than Doug said it was worth (someone finally convinced him that luxury houses and apartments wouldn't be appropriate for that part of Aston with the M5 running above it?), especially for Doug and the board as it will help ease the shock of the interim report.

But now we have sold part of the land bank that Doug has valued so highly over the years (and credit where credit is due, buying and selling the land at a profit is good business) does that now mean that Villa are no longer being pitched at £64million but that they will be available to potential suitors (if indeed anyone ever comes forward) for £57million?

Or is that not how Dougeconomics work?




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The Journalist

Writer: J P Fear Mail feedback, articles or suggestions

Date:Wednesday June 7 2006

Time: 7:53PM

Your Comments (oldest first)

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Should do!!!
Villain Of The North
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07/06/2006 21:20:00

M5? That's some car park! As the M5 is several miles away surely we should have got more than £7m for a piece of land that big?! ;o)
Silver Fox
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07/06/2006 21:27:00

It's not how any economics works! When the sale price for this land is received it goes into the company and will be used to reduce bank overdraft or buy other assets, maybe even players! So if the sale price for 100% of the shares had built into it that this land was worth £7m, then the sale price, on the face of it, should stay the same.
moonstone
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07/06/2006 21:32:00

strange the sale valuation is based on an expected valuation of the clubs assets. If the assets about to be sold were valued at 7 million you are right otherwise what you say is pure *********, especially if as it seems the land was valued much higher in the sale brochure.
avfc48
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07/06/2006 22:46:00

Not sure I agree with your assesment there moonstone, the value of AV Plc includes the land, if that land is sold, it will no longer be part of the assets. Of course the asset will still be there but in terms of cash rather than land, and therefore the value of the company is unchanged. However, if reports are correct, the land was valued as an asset with a higher value than it's sale price, or to put it annother was, with thoughts for pålanning permission and redevelopment, it was overvalued. This sale, if aporved will fix the price of the asset at it's actuall market value, and with this being lower than the estimated value as an asset owned by the company, the overall value of the company will be reduced. It will also realize a fixed asset into it's "liquid" form, or to put it another way, it will be available for investment in whatever way the board sees fit. But I doubt that will be on players, probably on debt reduction unless it's true that we are a debt free club, in which case , who knows? Bodymore Heath perhaps.
Villain Of The North
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07/06/2006 22:55:00

Just a little footnote. If the board decide to disperse funds by way of dividends, to the shareholders (highly unlikely, but possible) the value of the club for sale in one way decreases, due to the club having fewer assets, but in another way increases as, by the natural law of supply and demand, any company shares on the stock exchange that pay a dividend increase in value as they are more desirable. ;-) So in essence, nobody really knows until it happens.
Villain Of The North
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07/06/2006 23:01:00

Lads you are looking at this the wrong way, he sold it for 7m so he could give the dreary one some buying power, he heard Damian Duff might leave Russia and as he is going to sell Barry to Spurs wants to show he still has ambition????
irish villa
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08/06/2006 08:10:00

The crux of the matter is the "potential" value of the land. It was valued at only 100k on the balance sheet, but was clearly worth more than that. The same could be said about Aston Villa plc. If the total share issue was only valued at (for example) 34 million, and Ellis was asking for 64 million, he was asking for that extra 30 million on the basis of the "potential" value of assets which were undervalued on the balance sheet/stock exchange. Now that this land has been sold, it reduces the balance sheet fixed assets by 100k and, subsequently, the potential value should be decreased by 7 million. The big question is what portion of the premium value Doug was placing on the company did this land take up? My best guess is that Doug will claim to be have got a much better deal for the company, that the land was only worth (at a guess) 4 million so the asking price is now 60 million. But, the flip side of it is that the Comers and Villa were said to be 10 million apart in their respective valuations of the club. Maybe they'll compromise on 7 million and bid at 61 million?
GaztonVilla
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08/06/2006 08:31:00

Personally I don't think that this is good news for the Corner's bid. Remember that property development is their business. Do you honestly beleive that Doug would get a better deal or make better use of the land than a familiy that has made over £1 billion by buying / selling / developing land? Not me!!
Villain Of The North
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08/06/2006 09:39:00

Still £10m over the market cap, u got to be mad to buy it for that price. Hardly a lucrative club at the moment are we!
leelindsay
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08/06/2006 10:48:00

In theory the money from the sale goes into the club so the overall value of the club would be the same. If the land was valued at 100k then the value of the club should go up by 7m. However the money won't go to the club. Where's all the money gone Doug?
ooahPaulMcGrath
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09/06/2006 06:29:00

 

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