GAINING CONTROL OF THE PLC
Suppose Mr X wants to gain control of QPR Holdings plc. He will need over 50% of the shares to gain a simple majority.
The value of the shares was quoted by the directors at the last AGM in May 2003 as 6.5 pence each.
Since Mr X wants to buy more than 29.9% of a plc, he must by law make an offer for all the other shares as well, at the highest price he has paid accumulating his stake in the past 12 months.
To obtain 51% of QPR Holdings plc Mr X will have to buy 31,208,423 shares. If he can find people who are willing to sell to him, and if the asking price is 6.5p per share, this will cost him approximately £2m.
And now, because he's acquired over 29.9% of the shares, he will have to offer just under £2m to the other shareholders of the plc as well.
So Mr X needs to have over £4m at his disposal to take control of the plc. Even if Mr X can find this £4m he will still inherit the same financial problems that the current Board has with the £10m loan.
If the plc converted to a private company it would be cheaper to buy QPR (the legal costs of converting to a private company are estimated at £50,000).
Then Mr X could buy 51% of the company without having to make an offer to the remaining shareholders. In this scenario £2m would be enough to gain control of the club. But the existing debts including the £10m loan would still be inherited.
Related Links:
QPR Holdings plc: The Shareholders List
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