Changes to Plus Markets: will Arsenal de-list their shares?

  • Plus Markets, the stock exchange where Arsenal shares are traded, announced on May 14 it was closing
  • It’s since been taken over with a promise to keep it open
  • For different reasons, both Stan Kroenke and Alisher Usmanov may have preferred if it had closed, removing the marketplace for Arsenal shares

That’s the executive summary. If you want the full story, read on . . .

Arsenal shares are currently traded on Plus Markets Group’s ‘PLUS-SX’ stock exchange, which describes itself as “a London-based stock exchange providing cash trading and listing, derivatives and technology services.” Plus Markets also says it “delivers product innovation and competitive pricing to market participants by operating a low cost base RIE [Recognised Investment Exchange]. PLUS offers a neutral trading environment, wholly independent of any market user.” More simply, it provides an alternative to a full stock exchange listing for around 150 smaller companies such as Arsenal and the brewer Adnams.

Plus Markets announced on Monday 14 May that it was to close, having made losses and failed to find a buyer for the whole of its business. There was no date set for the closure, but it was expected to be within six months. However, on Friday 18 May it was announced that ICAP, a FTSE100 company and in their own words “the world’s premier voice and electronic interdealer broker and the source of global market information and commentary for professionals in the international financial markets” would take over the Plus group. They’re paying a nominal price of £1 for the business and say that they intend to keep the PLUS-SX exchange going and indeed expand it, which would mean no change to Arsenal’s current share arrangements.

Things may not be that simple, though. Analysts believe it’s going to be difficult to turn the Plus Markets business round and start to make money, and they believe the main reason ICAP are interested is just to get their hands on Plus Group’s RIE licence, which is one of only five issued by the UK regulator. The licence allows its holder to compete with other European stock exchanges at a time when regulation is being beefed up and off-exchange trading is being pushed on to recognised exchanges. ICAP may not be bothered about supporting the companies that currently list on PLUS-SX.

So where would that leave Arsenal? If their exchange closes then they have the choice to apply to join another exchange or to simply allow their shares to be traded privately. There are benefits to both options.

The most important benefit of a listing is that it creates a market for shares where buyers and sellers know they will find each other, meaning that both are more confident in owning shares. Shareholders know they will always find a buyer if they need one, and will receive a fair price based on good market knowledge. Other benefits include:

  • Enhancing the status of the company
  • Increasing public awareness and interest in the company and its products
  • Providing the company with an opportunity to raise funds by new issues of shares.

Of these, only the last is likely to be of much use to a football club, and with Stan in charge we can rule that one out at Arsenal as well.

There are drawbacks to a listing too. In Arsenal’s case these are chiefly:

  • The need to adhere to the rules and regulations of the exchange and its governing bodies
  • Some loss of privacy and increased media and public access to information as a result of the above.

Given the fact that almost 97 per cent of Arsenal shares are now held by two people, neither of whom care about any of the other shareholders including each other, the fact that a listing creates a stable market for shares might also be seen by the owner as a disadvantage.  So it might well be that any change to PLUS-SX will be used by Stan Kroenke as an excuse to de-list. Stan doesn’t need a market because he has no need to go out and buy shares, and de-listing means he won’t need to answer to regulatory bodies in the same way he does at the moment.

For small shareholders, de-listing may not be so welcome, as they will lose the safety net of always having someone to sell to. Many of the remaining small shareholders are lifelong fans who will never sell, but de-listing may panic those who were thinking of selling into looking for a buyer while they can. And of course there is one: Usmanov. So even the threat or expectation of de-listing may mean he suddenly has a lot more shares offered to him, and his 30 per cent target might be reached very quickly.

Would that put Stan off the idea of de-listing? I doubt it. I think the implications of Usmanov reaching 30 per cent are overstated. The plain fact is that Stan owns two-thirds of Arsenal and can maintain that position as long as he wants to. He doesn’t need to answer to anyone else even if Usmanov is granted access to additional information when he reaches 30 per cent.

Further Usmanov / Arsenal share information here: Usmanov Q & A

Follow me on Twitter: @AngryOfN5

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4 thoughts on “Changes to Plus Markets: will Arsenal de-list their shares?

  1. Kroenke will sell if Usmanov offers a big return fast & now he has 6 gillzon from facebook who knows

  2. Unfourtnatly Kroneke has never sold a single share in any of his sports investments and he has also never put a penny into any of them. He buys sports clubs and then alllows them to slip into a nice rhythm of mediocrity and more importantly profitability. As long as share prices and profits are high he will never leave. He has destroyed many american teams by cronic underinvestment and actually had to borrow the money to buy Arsenal shares from Deutch Bank becuase he can’t actually afford Arsenal which is why they keep bleating on about sustanability when really they mean profitability as that is the order from Kroneke. The reason he comes to very few games is because he is a man city fan and sees Arsenal as nothing more then another franchise. Ask any US sports fan who has had Kroneke as an owner and they will tell you that there side has dropped away from being competetive but do turn over a nice profit for there owner. De- listing shares would be good for both majority shareholder as regulations would be lifted on Kroneke and some small shareholders would turn to Usmanov for a quick sale. I personally think that Kroneke should sell his shares to Usmanov and the Fanshare program and in fact I would urge Usmanov to offer to pay for some of the fanshare based shares up front anid then get paid back for them. I would arrange a 49% 51% ratio in Usmanovs favour with the fans owning just under half the club. This way the fans will have there say with a wealthy owner who wants to see success but enough of the fans voice on the board to make sure no unmanagble debt is accumilated. Which I dont think would happen with Usmanov as he is no Imbramavich. We need Kroneke out as quick as we can. Seriously even AW wants usamanov in he even said he doesn’t understand why he isn’t on the board.

  3. Oh just one more comment on the article its good by the way, its that there is one set of people that Kroneke has to answer too and actually hold all the power. Thats us the fans and we can if we want get rid of this guy. And well we should and when usmanov gets on the board he can tell if they are sitting on hoardes of cash or not and this will dictate of Kroneke remains a shareholder as the fans will not be impressed if it turns out there just being tight for the sake of it. Which we know is the case we just need someone to give us the exact figures, as that someone actually cares about the club and its fans. Ok I’ll shut up now.

  4. We’re are all desperate now that Chelsea have finally won the UCL. well it wont hapen that Kroenke will sell his shares. The Arsenal board dnt care about the fans and thats that! I think we will win nothing for a very long time.

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