by Hardy on 12/09/2016
Things bave moved on a lot since our last update on the proposed investment into the football club, so here is a summary of where this is all at.
Things bave moved on a lot since our last update on the proposed investment into the football club, and the interview with Daggers chairman Dave Bennett so here is a summary of where this is all at as is best available.
Following the Full Members meeting with Glenn Tamplin on the 22nd August the two interested groups in buying in to the club, led by Glenn Tamplin and the Easts were asked to go away and talk to try to come up with a joint proposal that they were all happy with which could be put to the Members to vote on at an EGM, date to be agreed.
This meeting took place on Friday 2nd September at Glenn Tamplin's offices, and seems to have not reached any kind of agreement on how the parties could amicably work together in the club's best interests. The resulting exchanges have been aired publically and it is all starting to turn a bit nasty.
On the 6th September Dave Bennett sent out a letter to Members advising them of the discussions that had taken place on the previous week and the proposals made which is reproduced below.
Proposed Investment into the Football Club
I write further to the meeting on 2 September between interested parties as agreed at the Full & Life Members meeting held on the 22nd August. This letter is to advise you of an investment structure that was proposed by John East, Brian East and John Goodwin on behalf of themselves and Graham Bramley and David Ward.
Firstly, I would like to put it on record on behalf of the Board of Directors of the Club our thanks to all parties for their involvement and their clear desire to assist the Club going forwards.
The proposed investment structure was as follows:
An investment of £1,000,250 over the next three years:
Investment (£) Ownership (%)
Glenn Tamplin 625,000 50
Chris Smythe 62,500 5
David Bennett 62,500 5
David Ward 50,000 4
G Bramley 50,000 4
J Goodwin 50,000 4
B.A.A East 50,000 4
J.R.A East 50,000 4
Members Club 250 20
Total 1,000,250 100
The proposed Board would be nine strong and made up of all of the nine investors, each having one vote each with the exception of Glenn Tamplin who would have four votes. This voting structure was not considered equitable by Glenn Tamplin, Chris Smythe or I.
I have since been made aware that Glenn Tamplin will not accept this Proposal as currently set out.
In an effort to compromise Glenn Tamplin contacted John East on Sunday morning and offered an alternative structure which would allow the eight proposed investors to continue their investment, but on equal footing. Glenn’s proposal would see him not take a controlling interest in the Club but instead each of the eight would invest from day one £125,000 in return for a 10% share of the Club. This would realise the £1,000,000 suggested by John East and result in a Board of 9, including the Members representative, with each having one vote.
The Chair’s position would be rotated between the Board Members but the Chair would not have a casting vote. To ensure the £1,000,000 was realised Glenn also generously offered to commit to take up any shares if anyone was not able, or prepared, to accept this level of investment. Although obviously he would also receive extra voting rights in line with any extra investment. To date whilst he has answered requests for clarification on some points he has not received an acceptance or refusal to this revised offer.
In the event that this revised proposal is rejected the Consortium, led by Glenn Tamplin, has put together a new proposal that they are willing to put forward as a firm offer:
An Investment of £800,000 will be invested into the Club within the next two years with the following investors:
Investment (£) Ownership (%)
Glenn Tamplin 600,000 60
John Still 100,000 10
Chris Smythe 50,000 5
David Bennett 50,000 5
Members Club 0 20
Total 800,000 100
The proposed Board would be six strong and made up of Glenn, John, Chris and David as well as Steve Thompson and one representative of the Members Club.
Each director would have one vote.
We would urge all members to consider fully the details of this letter.
The Board has not sought to recommend to the Members one Proposal over another but as you are all aware, the Club is urgently in need of additional finances, and it is therefore in the best interests of the Club to resolve the investment as soon as possible.
We hope to be able to issue notice of a formal Members meeting for your consideration by the end of this week.
The big surprise here is that John Still appears to be now part of the Tamplin group, and making a significant investment, effectively proposing to end up holding 10% of the football club if this goes through.
The other surprise is that the club, previously valued at £1.5m has now been valued at £1m, with the inward investment being reduced from £1.25m to £800k.
The East's position
On the 7th September a letter from the consortium led by John and Brian East to Dave Bennett was published at the Daggers Forum in reaction to the members letter above and a private series of emails that were also published at the forum, but quickly removed. The letter is reproduced below.
I write on behalf of our consortium following the letter to members sent by the board yesterday. We were surprised that you issued it at noon yesterday, while negotiations were still continuing, as this seemed somewhat premature. However, as you may now be aware, we have rejected Glenn's suggestion that we all invest £125,000 each, as set out in my email to him slightly earlier today, for the reasons set out below.
Now that those negotiations have been terminated and since there have been a number of misunderstandings and different recollections of events, we feel that it is important to set out the facts as we see them, for the benefit of board members who were not present at last Friday’s meeting, in order to put them on the record.
There was a meeting last Friday between John Goodwin, Brian and me with Glenn Tamplin, Chris Smythe and you at Glenn’s offices. Your letter refers to a suggestion put to Glenn Tamplin by us regarding board voting. The idea of giving Glenn four board votes was to increase them to a level which when taken with yours and Chris’s totalled six votes, matching the votes of the consortium directors, which include Lee Goodwin, omitted from the table in your letter. That would have taken the voting structure to six votes all, with the casting vote held by the representative of the members. We accept that at face value this may have seemed seem onerous, but, as we discussed, we felt that it was essential to address the background issues and concerns of members and supporters, which we have rehearsed in detail, due to Glenn’s commercial history. We believed that many would be very uncomfortable with him having full control initially. However, Glenn was not able to accept this and insisted on absolute control. I suggested in my email to Glenn on Monday morning that this restraint could be time limited, but he has not responded to that concession.
However your letter does NOT cover and is completely silent on the other main concern we raised, being the need for Glenn to give security, or a bank guarantee, to ensure certainty that his proposed future payments will actually be made and received by the club. In the proposal we made, these were for only £162,500 in 2017 and 2018. We were genuinely surprised that you had not insisted on, or even raised this, as it is critical to any deal and is normal in situations like this. This is a major concern, as you will have heard at the recent members’ meeting and the members would expect you to protect their interests in this regard. As you will recall from our meeting on Friday, Glenn was unable or unwilling to provide any evidence of funds, security, or bank guarantees whatever for future payments, which are so essential to protect the club in the future. I will leave to you to tell the Board the reason why he felt unable to provide these.
We left him to consider our proposal. On Sunday, he sent me an email rejecting our suggestions and proposing the offer for all of us to commit £125,000 each. That email is the first attachment. I replied on Monday morning seeking clarification. That email is the second attachment. At 5.42 p.m. Glenn replied clarifying and confirming certain points. That reply is the third attachment. Glenn also sent an email to me at 5.10 a.m. on Tuesday morning which is the fourth attachment. It is attached without comment .
I also attach an email sent to Glenn a few minutes ago rejecting his proposal and setting out the reasons. In particular, it said: “Whilst at face value this seemed very appealing, it was always impractical, as we are all aware that some of the consortium would be unable to raise £125,000 initially and the consortium members have always agreed that we are in this together.”
However, in his email sent at 5.54 p.m. on Monday, Glenn did offer unconditionally to underwrite our total proposed investment of £625,000 and he also confirmed that you and Chris had committed unconditionally to invest £125,000 each all, on day one. That offer seems to have vanished, to be replaced by the proposal contained in your letter to members sent at around noon yesterday. I am sure that the members would welcome full clarification of the following issues which remain unclear:
1 It would be helpful to know what payments are proposed to be made, when and by whom?
2 At what point is it proposed that Glenn acquires his 60% shareholding
3 What steps have you taken to ensure that any future payments are evidenced by a display of funds, secured by a charge against realisable assets, or guaranteed by a bank, so that the club can be certain that they will be forthcoming?
On behalf of us all I would like to reiterate your comments that there was a clear desire to help the club and we are disappointed we were unable to come to an agreement to work together in the best interests of the club, as the members clearly indicated that this was their wish at the most recent members’ meeting.
We should advise you that we, as an enlarged consortium taking into account Graham Bramley’s involvement, will be reviewing our initial offer with a view to increasing it. We will send a formal proposal to you shortly and request that you do not issue the notice convening a General Meeting until you have received it, so that the increased proposal, together with our other proposed resolutions, can be included for the consideration of members.
In the interests of transparency, we reserve the right to publish this letter and the email attachments referred to.
The Tamplin position
Dave Bennett responded to this correspondence with an email/letter to John East on the 9th September. This time the letter was immediately put up on the Daggers forum by the Tamplin side in an obvious recognition that the PR war was being won by the Easts to date. This is reproduced below.
To answer your email in the order that you have written,
My letter to members was sent out in good faith, I have been criticized for not keeping members informed, so I guess I can not win. The letter clearly says that we are waiting a response from you. I realised that the supporters also want to know what’s going on, and I presumed that someone would post a copy on the forum, which they promptly did.
On to the meeting, Friday 2nd September 4pm at the office of Glenn Tamplin.
You arrived at 4.30pm, a good start.
You handed out a sheet of paper headed “Subscription Table” which was a proposal of investment being suggested by you,
What is omitted from this table is your proposed vote schedule, as you read them out, I wrote them in on my copy, next to the % holding figure.
Your table shows John and Lee Goodwin listed together as the Goodwin’s,
You proposed that Glenn had 4 votes, then you, me, Chris, Dave Ward, G. Bramley, The Goodwin’s (together), Brian, and the members, 1 vote each.
At no time did you propose that the Goodwin’s would have a vote each, and it certainly would not make sense. You argued that if Chris and I backed Glenn we would have 6 votes together, the remaining share holders, including the members, also would have 6 votes, Glenn asked for 6 votes for himself, then 5, you would not agree, he asked for the casting vote, once again you would not agree. So unless you are saying that this did not happen, there is no room in the math to include an extra vote for Lee. So I really don’t know why you have raised that point, when it simply was not mentioned.
There was plenty of further discussion on this, i.e. Glenn putting in 12.5 times the amount of money as you but only having 4 votes, Chris and I being asked to put in more than other 1 vote holders, etc etc.
Moving onto security, guarantees etc
I thought, and I believe Chris did too, that you were being highly unreasonable, bearing in mind that by the time we would have got to this stage Glenn would have paid at least 312,500.00 already, surely if you are prepared to join in a consortium with someone, you should trust them. Clearly it’s not the case that Glenn can not guarantee payments, it’s his reluctance to be bullied into it.
We had already agreed that shares would be forfeited back to the members if payments were not made. I was quite comfortable with the matter.
Concerning the paragraph where you refer to an email sent by Glenn on Monday re his proposal. You seem to have overlooked the fact, that at that point, we had not had a reply from you, once again, quite clear in my letter.
Since I sent out my letter we have now received your reply declining Glenn’s offer, citing lack of funds on your part.
Regarding your request for clarification of Glenn’s latest offer, this is based very much on what was being offered at the last informal members meeting,
This will all be set out with the offer when it is sent out to the members to consider.
As you have since acknowledged, I have agreed to wait a while to receive your revised offer.
John, throughout your letter you refer to your consideration of the members and supporters, I can not help but think to myself how shallow this sounds, I and other board members present remember very well your reply to me at a very early stage of discussions. To remind you, you had suggested 5 or 6 people investing 40 or 50,000 pounds a year for 5 years. This whittled away to just 4 people investing 40,000 for one year, my response was that I would not want to recommend that to the members, 160,000 total was not enough money; I believe I actually said that I felt it was insulting the members. Your reply was words to the effect “If it’s the only offer, they will have no choice but accept”
I think this answers all the points that you have raised.
However I will add one last point to my response, to record that I declared myself personally OUT of negotiations with you when you began your “Thompson Out” routine!
I also reserve the right to publish this letter / email etc.
Hopefully someone will post it as quickly as your reply to me.
The document referenced above - click to enlarge
So what next?
It is obviously all getting a bit ugly now, and any hopes of the two sides working out a way that they can all invest for the good of the football club seem to be over. To be fair to Dave Bennett he has consistently stated that the money proposed by the Easts to date was not enough and the proposal they made at the meeting on the 2nd September demonstrates this.
Having said this, the Tamplin side of the bid are now wheeling out John Still as part of their group, and John got involved in public at the weekend by stating to the Non-League Paper following a supporters protest at the end of the 5-2 away win at Solihull Moors that he would leave the club if the protests continued, accusing the protestors of undermining the team. This smacks of a major conflict of interest from the manager.
This may prove a bit of an own goal by Still to be honest. Fans are allowed to protest, and say they only did so after the final whistle. However, the protests were described to us as "not pleasant" and containing "foul language and abuse" aimed at individuals. If so this was shameful.
The group protesting do not help their cause by being abusive and DiggerDagger condemns anything that oversteps the mark, particularly if it gets personal.
DiggerDagger will continue to update fans on what is happening as it gets more information, and is pressing the club to hold a fans forum where all supporters, not just Full Members, can meet and hear from the parties looking to invest.
Stop Press - New consortium offer
Shortly after publishing this item details of a revised offer from the East Consortium was published at the Daggers Forum as follows.
Dagenham & Redbridge Football Club Limited – increased consortium offer.
I write on behalf of David Ward, John Goodwin, Lee Goodwin, Graham Bramley, Brian East and myself (Consortium”). You will note that Graham Bramley has joined the Consortium.
On 22 June 2016, we submitted an offer to the board to invest £200,000, subject to contract, in a new company to be formed as the parent company for Dagenham & Redbridge Football Club.
The purpose of this letter is to inform you that the Consortium now increases its offer of investment to £500,000, (FIVE HUNDRED THOUSAND POUNDS) subject to contract and to satisfactory due diligence, again into a new holding company to be formed as the parent company of Dagenham & Redbridge Football Club Limited, as set out below:
£ Investment on completion | Investment in July 2017 | Investment in July 2018 | Total Investment | Ownership %
Brian East |75,000| 50,000 | 50,000 | 175,000 |17.9%
John East |60,000| 50,000 | 50,000 | 160,000 |16.3%
John & Lee Goodwin| 65,000 | - - | 65,000 | 6.6% (between them)
David Ward| 50,000 | - - | 50,000 | 5.1%
Graham Bramley| 50,000 | - - | 50,000 | 5.1%
Total Investment| 300,000 | 100,000 | 100,000 | 500,000 | 51%
Members Club - - - 49%
Evidence of the availability of the initial investment of £300,000 will be made available at or before the forthcoming General Meeting. If the members support our proposals at that meeting, the £300,000 to be invested on completion will be placed into a solicitors’ escrow account, pending completion of legal formalities. Barclays Bank PLC, or another institution of similar standing, will provide evidence of the ability of my brother Brian and I to make the 2017 and 2018 payments, or a bank guarantee if required.
As can be seen from the table set out above, the investment represents 51% of the share capital of the new company held by the Consortium members pro rata to their investments, with the Members’ Club holding the remaining 49%. The directors would comprise the investors together with an elected representative of the Members Club. Each board member would have one vote.
We would ask you to note the following:
1. Under our proposal, no one individual will hold more than 17.9%. All directors will have one vote, so no-one will have control of the club.
2. The members club will hold 49% of the club under our proposal. This is a large shareholding for a nominal payment and it demonstrates the strength of our commitment to the members. The notional value placed on the members club’s 49% shareholding is £480,000.
3. As you know, Brian and I have between us given the club substantial sums of money totalling well over £100,000 over the years and David Ward has also made substantial donations Neither he, nor we, have ever sought recognition for this. Our sole purpose was to help the club and our proposed investment is not for any financial gain. That remains our focus and we are delighted that like-minded friends have joined us.
4. At the informal meeting, the possibility of amalgamating the Supporters Club with the members was mentioned. If the members approve our proposals, we would consult widely on this suggestion as we think it is an excellent idea.
5. We have set out above our procedures for demonstrating funds required on completion by providing evidence of the initial investment of £300,000 at or before the forthcoming General Meeting and by undertaking, if the members support our proposals, to place the initial investment of £300,000 into a solicitors’ escrow account, pending completion of legal formalities. We will also demonstrate that the future payments are secure by obtaining confirmation from Barclays Bank PLC, or another institution of similar standing, of evidence of funds, or a bank guarantee if required. We would expect any other parties making an offer to do likewise.
6. All the members of the consortium have been involved with the club for a long time. With one exception, none of us has been involved in the running of the club (being joint presidents does not carry a board position). So we can look at everything afresh and objectively, and, if the members approve our offer, we will seek to rectify the current problems urgently and also work to recreate the happy and united club we used to be.
7. We continue to believe that this substantial injection of funds will allow the Club to continue to trade, while we stabilise the position, ascertain the future funding requirements and identify other like-minded investors, to create a long term solution.
We urge you to consider this proposal seriously and to substitute it for our earlier offer in the Notice of General Meeting to be sent out shortly.
DiggerDagger understands that Graham Bramley is an ex Mayor of Barking & Dagenham and long term supporter of the club.
This offer more or less matches the Tamplin valuation of the club at £1m but only offers £500,000 of actual investment over three years, with the Members retaining 49% of the new company, albeit with only one vote on the board which does not seem equitable.
We await further developments.