I remember interviewing Brian Quinn in 2005 ahead of the share issue Celtic announced would take place later that year. For Brian, it was a relatively safe environment to speak freely, and he did on many subjects, on and off the record, but when it came down to money, the share issue and financial plans, there was a discernible pause before each answer.
Every word attributable prior to a share issue becomes a hostage of fortune, which the club had learned to its cost.
Within days of Celtic announcing this share issue a newspaper and a broadcaster (it was one journo working for both outlets) misrepresented one stated intent of the 2001 share issue to develop a Youth Academy (which Celtic did in customary winning style) as an intent to build a physical building (which Celtic didn’t, never raised enough money to do, nor included in any notice of intention or prospectus). Readers bounced straight from the newspaper and phone-ins onto Celtic Quick News with their journalist inspired, but erroneous, complaints. Proclaiming solid reasons not to trust Celtic at a share issue. A muted retraction followed after the damage was done.
The short lesson from any of this is that when you advertise a public share offering you need to be careful when providing information, which casts so much of what Charles Green said yesterday in a surprising light:
“There’s not been anything underwritten in London in the past seven or eight years to my knowledge. Whenever it occurs someone takes a fee for it.”
“To my knowledge” is an enormously useful phrase.
“I’d be happy to underwrite it but what will happen is in three weeks’ time you lot (the media) will have my trousers around my ankles saying ‘Charles Green underwrit (sic) Rangers’ and took a three per cent fee when it didn’t need doing.
“The reality is we don’t need to underwrite it as there will be no shares left over.
“But if they’re not (taken up) of course we’ll take them.”
To potential investors this means a lot. Companies raise capital because they have identified a need. If the required sum is not raised it can jeopardise plans. Enormously so, in some cases. Having a share issue underwritten means that a company’s fall-back position is established. The company knows that the minimum sum required will be realised before it takes money from investors – which, remember, is invested based on formal plans.
The phrase “of course we’ll take them” has a potential cost of £1m per letter. The most expensive comment made in Scottish football, ‘to my knowledge’!