My reading is….

He’s subscribing for £10m of prefs with a 7% dividend with a 7 year term. Given he’s coming on to the board, he’s almost certainly buying out Foulger (although not confirmed, I think we can take that as a given).

In the event of a change of ownership, (e.g. Delia and MWJ sell up, or gift their shares, to someone else), the preference shares can be redeemed at MAs election, but if he chooses not to, he can instead convert them (and forfeit any accrued but unpaid dividends) into ordinary shares (10% of the company), or just leave them in existence.

Based on the information available, there’s nothing to suggest there is a plan for MA to become the majority owner. If Delia and MWJ hand their shares to Tom, MA has the option to get the cash invested on the prefs back, or keep them, or convert them into ords. To me options are about giving MA flexibility in relation to the prefs depending on things that could happen that are outside his control.

That said, my best guess, as we thought all along, this is an initial investment and opportunity for both parties to work together with a view to a bigger investment in the future.

Posted By: SimonOTBC, Aug 22, 15:15:26