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Villa Takeover Details Pt 1

Villa Takeover Details Pt 1

1. Introduction

The boards of RAL and Aston Villa are pleased to announce that they have agreed the terms of a recommended cash offer by RAL to acquire the entire issued and to be issued share capital of Aston Villa. RAL is an English company which was newly incorporated for the purposes of making the Offer and is ultimately controlled by Mr Randolph Lerner, owner of the Cleveland Browns Football Club,USA.

The Offer will be 547 pence in cash for each Aston Villa Share. The Offer values Aston Villa's entire existing issued share capital at approximately £62.6 million.

2. Summary of the Offer

Under the Offer, which will be subject to the conditions and further terms set out below and in Appendix 1 to this announcement and the full terms and conditions which will be set out in the Offer Document and the Form of Acceptance, Aston Villa Shareholders will receive:

547 pence in cash for each Aston Villa Share

The Offer represents a premium of approximately 47.24 per cent. to the Closing Price of 371.5 pence per share on 16 September 2005 (being the last Business Day prior to the date of the commencement of the Offer Period) and a premium of approximately 9.95 per cent. to the Closing Price of 497.5 pence per share on 11 August 2006 (being the last Business Day prior to the date of this announcement).

Aston Villa Shares will be acquired fully paid with full title guarantee and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and any other third party rights and interests of any nature whatsoever and together with all rights now and hereafter attaching thereto,including, without limitation, voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid thereafter.

3. Irrevocable undertakings

RAL has received irrevocable undertakings to accept the Offer in respect of a total of 6,508,423 Aston Villa Shares representing, in aggregate, approximately 56.85 per cent. of the existing issued share capital of Aston Villa, comprised as follows:

(a) from each of the Aston Villa Directors (and certain members of their immediate families) in respect of their entire beneficial holdings which amount, in aggregate, to 4,111,514 Aston Villa Shares representing approximately 35.91 per cent. of the existing issued share capital of Aston Villa; and

(b) from Trefick Limited in respect of its entire holding of 2,396,909 Aston Villa Shares, representing approximately 20.94 per cent. of the existing issued share capital of Aston Villa.

All of these undertakings will cease to be binding if a competing offer is announced for Aston Villa which exceeds the value of the Offer by more than 5 per cent. and which is recommended for acceptance by the Aston Villa Board.

Further details of these irrevocable undertakings are set out in Appendix 3.

4. Background to and reasons for the Offer

On 19 September 2005, Aston Villa announced that it had received a preliminary approach, which might lead to an offer for the entire issued share capital of Aston Villa. This was subsequently confirmed to be from Aston Villa Investments Limited ('AVIL').

Following the original approach from AVIL, discussions were held with a number of other interested parties, with a view to consummating a transaction, which would be in the best interests of Aston Villa Shareholders and which would ensure the future stability of the football club. During this time, Aston Villa has found it increasingly difficult to compete, both on and off the field, with some of the larger clubs within the FA Premier League, many of whom do not have the funding constraints imposed on a public company.

Moreover, the recent appointment by the Board of Martin O'Neill as the new manager, and the new media deals commencing in the 07/08 season, mean that this is a pivotal time both for Aston Villa and the football club. In light of these factors, the Board believes that it is essential that the question of ownership is resolved as soon as possible.

The discussions with interested parties have resulted in the Offer by RAL. The
Board of Aston Villa believes that RAL's Offer not only fairly values Aston Villa, but that RAL will also provide the potential for the Club's future on field success.

The Board of Aston Villa believes that backed by Mr Randolph Lerner, owner of the Cleveland Browns Football Club, USA, Aston Villa will again be able to compete at the highest levels within the Premiership and Europe. RAL believes that in order to make Aston Villa a consistent competitor within the UK and in Europe, it must engage local support on multiple levels. These would include traditional supporters as well as the corporate community, among others.

RAL strongly believes that an integrated approach is required and will be looking to allocate financial resources across multiple fronts such as an upgraded training ground and facilities (which are intended to include the academy), stadium upgrades and player acquisitions, all of which will provide Aston Villa with the opportunity to build upon its existing strong foundations.

Further information with respect to the longer term strategy of the Club and the
effect on employee arrangements can be found in paragraph 10 below.

5. Recommendation

The Aston Villa Directors, who have been so advised by Rothschild, consider the terms of the Offer to be fair and reasonable. In providing its advice, Rothschild has taken into account the commercial assessments of the Aston Villa Directors.

Accordingly, the Aston Villa Directors intend unanimously to recommend that Aston Villa Shareholders accept the Offer, as the Aston Villa Directors (and certain members of their immediate families) have irrevocably undertaken to do in respect of their own beneficial shareholdings which amount, in aggregate, to 4,111,514 Aston Villa Shares, representing 35.91% of the existing issued share capital of Aston Villa.

6. Information relating to RAL and Randolph Lerner

RAL, a company incorporated in England and Wales, was formed on 31 July 2006
exclusively for the purpose of making the Offer. Since its incorporation, RAL has not traded.

The current directors of RAL are Randolph Lerner, Michael Martin and Michael Keenan. RAL is a wholly owned subsidiary of RALLC. RALLC, is a limited liability company incorporated in the State of Delaware and is wholly owned by Randolph Lerner.

Randolph Lerner is the owner of the Cleveland Browns Football Club, USA (the
'Browns'), a franchise founded in 1946 as a member of the All-America Football Conference ('AAFC'). In 1950, the Browns joined the National Football League ('NFL') following the merger of the AAFC and the NFL. Randolph Lerner's father, Alfred Lerner, purchased the Browns on 8 September 1998 and the NFL formally transferred ownership of the Browns to him on 23 October 1998. Following the death of his father in October 2002, Mr Lerner has owned and managed the Club.

The Browns qualified for the playoffs following the 2002 season in January 2003. In 2004 and 2005, the Browns were less successful competitively, but significant changes were made in the management and operating philosophy. These changes culminated in 2005 with the hiring of a young, promising general manager as well as a seasoned and deeply respected head coach.

The Browns enjoy very strong fan interest and support. Since the commencement of Mr Lerner's ownership, the Club has sold out all available tickets. The Club has the largest organised fan club in the NFL, known as the Browns Backers. The Browns Backers has clubs in all 50 States, Puerto Rico and over 20 International Clubs including Essex England, Perth Australia, Mali West Africa, Misawa Japan, and Sri Lanka.

Over the past four years, the Browns have spent significant funds on stadium and
training facility improvements. The goal of these upgrades was to improve fan experiences and strengthen player recruitment efforts.

The Browns have at the same time worked diligently to maintain comparatively modest ticket prices.

Prior to his involvement with the Cleveland Browns Football Club, Mr Lerner spent 11 years in investment management. In 1991, Mr Lerner started an independent investment firm with Progressive Corporation called Securities Advisors, Inc., which he owned and managed. The firm was started for the purpose of investment management. Mr Lerner operated the firm until 2002 when responsibilities resulting from the loss of his father required that he dissolve it.

In the period from November 2002 until December 2005, Mr Lerner served as Chairman of MBNA Corporation and for the period from 1999 to 2002, Mr Lerner served as the Chairman of MBNA Europe, headquartered in Chester, England.

7. Information relating to Aston Villa

Aston Villa is the listed company which owns Aston Villa football club, one of
the foremost professional football clubs in the FA Premier League, the richest football league in world football. The Club has a history of achievement in the English football league and in European competition.

Aston Villa was listed on the London Stock Exchange in 1997, but the football club itself has been in existence since 1874 and was one of the 12 founders of the Football League in England. Aston Villa is one of only four English teams to have won the European Cup (now the UEFA Champions League), the foremost European competition, and has been winner of the English football league 7 times, as well winning the two 'knock-out' cup competitions held in England (the FA Cup and League Cup) twelve times in total.

8. Current trading and prospects

On 8 August 2006, Aston Villa announced its preliminary results for the year to 31 May 2006. Revenue for the year was £49.0 million (2005: £51.6 million), impacted by a fall in income from the merit award element of media revenue as a result of finishing 16th in the FA Premier League (2005: 10th). Loss on ordinary activities before tax for the year was £8.2m (2005: £2.6 million). As at 31 May 2006, Aston Villa had net debt of £12.1 million.

These preliminary results included details of two significant events which occurred in the period since 31 May 2006, namely the approval at an extraordinary general meeting of Aston Villa held on 10 July 2006 of the sale to Birmingham Community Sports Limited of the Serpentine Site property, and the appointment of Martin O'Neill as team manager on 4 August 2006, following the
departure of David O'Leary announced on 20 July 2006.

Prospects for the new season are positive. The impact of the appointment of the new manager is already being seen in an uplift in season ticket purchases. Financial performance is linked to on-field performance and whilst the Aston Villa Board can make no assurances about future on-field sporting performance, it views the new season with optimism.

Click here to join in the debate on the club forum.

Writer:J P Fear
Date:Monday August 14 2006
Time: 11:55AM


It's all just words, but as long as Doug is going thats all that matters! 3 Cheers for Randy Lerner!
14/08/2006 12:15:00
I think any Villa supporter coming on here to offer their opinions should also indicate if they are a season ticket holder or not. This is a vital period in the history of the club and the backing the club receives will probably be influenced by the level of fan support on matchdays. We are one of the best priced clubs to watch so if you are not prepared to put your hand in your pocket, then I do not think you should bother boring every body else with your views. Putting my own cards on the table I have three tickets near the front of the top of the Holte. Mine, my daughters and a spare one that I use for the missus (occasionally) or friends of my daughter or myself. However I do understand that their are fans who simply can not get to games (work, disabilties etc) but this is the exception rather than the norm.
14/08/2006 12:42:00
Trinity road upper (but not prawn sandwich!), I notice Neville is still making noises, am I the only one who hopes that he goes away now before trying to upset the already full applecart!!
14/08/2006 13:01:00
Holte end upper k season ticket holder, did neville ever realy put a proper bid in?
14/08/2006 13:22:00
I'm sorry Mr voiceoftheholte but i take exception to your request that anyone posting must have a season ticket. Some of us simply can't afford it. I have a new born daughter and a round-trip of 100miles to get to the Villa making it not possible week in week out. I certainly intend to attend as many games as possible this season but they will probably be limited to the cheap seats in the North Stand against crappy opposition as in the Reading game next wednesday which i will be going to.
14/08/2006 13:38:00
Congratulations...what Randy Lerner lacks in understanding of any kind of football and lacks in PR savvy, he more than makes up for with a great deal of money and a will to win. His father was a great man, and if Randy is 1/2 the man his father was, you'll have one of the best owners in the EPL. Don't hate him because he's from the US either; he's no Glazer.
14/08/2006 13:47:00
Dear Mr.voiceoftheholte now because we have money you have become an eliteist only the people who go to games can support the team thats a joke. I live in New York as much as I would love travel, I can not. But I watch all the games on TV and cheer when they win and am gutted when we loose. But what about all the people who live in 20 mile radius of Villa Park, perhaps you have forgotten where they are situated do you think every-one live in Sutton Coldfield or Edgebaston. Also what about the all the kids that have never been to a game but buy a jersey and put money towards the club with merchandise. I think this is a great day for Villa and I think you should be applauded for your support over the years but as the club gets bigger and better you should be appreciate that you have seen the good and the bad times at Villa park and welcome all the new supporters who will jump on the band wagon who will pay for the next big signing!
NY Villa
14/08/2006 13:59:00
voice of the holt, try thinking before typing, any idea how many fans you have just pi**ed off with your thoughtless remarks, some people are poor (me), some people (myself included) have a massive round trip to attend a match (for me 250 miles) and even more actually work at weekends while you are out enjoying the game (me, most of the time). so pull your neck in, it doesn't mean that we are any less of a fan than you, or that our views are any less valid.
14/08/2006 15:34:00
Voiceoftheholte - your name itself lends credence to the fact that you are self-styled in the same manner as Ellis (MrAstonVilla). I have not been a season-ticket holder for twelve years due to the fact that I emigrated. However, my twenty+ years of season tickets on the Holte (73 - 94) will hopefully meet your "requirements." My Dad (51-present), Mom (65-present), brother (71-present) and his family (94-present) will hopefully get me past your wall. I suggest you think before you speak next time - you sound like a Spurs fan......
14/08/2006 16:03:00
Lerner's said nothing particularly exciting. I want to see how much he will actually put into the club during the next 12 months. The minimum needs to be - 1. Pay-off net current liabilities (overdraft, PAYE, VAT and other creditors etc) - £25 mill minimum. 2. Cover another year of trading losses £10mill minimum. 3. Severance Pay (DOL and other managers and staff) - £5mill 4. Complete Bodymoor Heath Facility £5mill 5. New Players Transfers + Wages -3 x £10mill = £30mill Total £75mill This might secure a top 10 finish and a platform to go forward; but I would expect he will need to spend at least £30-£40mill for the following 2 years to get us to Top6 status. This is what he must do if his ambitions, as stated are true ie a Top6 Prem. Club competing in Europe. But somehow, I have a feeling he's not looking for a return to the “glory days”; he has other commercial motives driven by "media broadcasting" opportunities and he need ownership of a UK club to fulfil that objective. Remaining a Premiership Club will satisfy that – which is all that Ellis has done for us! So before you all get too excited let's see how much he is prepared to spend in the next 12 months!.
14/08/2006 16:03:00
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