Spurs bale out of AIM listing

Tottenham Hotspur, the Premier League football club popularly known as 'Spurs', is to delist from AIM and seek private finance to expand its stadium's capacity.

The news of the delisting saw Tottenham's shares fall 23% by 11.43am despite the firm reporting a pre-tax profit of £400,000 versus a loss in 2010 of £6.5m.

Tottenham's chairman, Daniel Levy, is desperate to increase capacity at White Heart Lane, the club's current ground, or possibly move to a new location altogether.

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The argument is very clearly made in today's announcement: "Increased capacity is necessary to generate additional revenue through which the investment made in the First Team squad over the past few years can be sustained in future years."

The trouble is, to increase capacity Tottenham will need to attract new investment and the rules surrounding publically listed companies make that difficult. The City Code requires disclosures about who holds significant stakes in a firm. In the secretive world of football transparency can put people off.

Explaining the decision the directors say they "believe that the company's AIM quotation restricts the group's ability to secure the necessary funding for its future development." They blame this on the limited liquidity of the AIM traded shares, while also pointing out there is not much appetite for equity capital raisings on the AIM market in the current climate.

Commenting on today's news Daniel Levy, the Chairman of Tottenham, said:

"We believe that the AIM listing restricts our ability to secure funding for its future development. We are ambitious for the club and have always taken the steps that we believe to be in its best interests."

Tottenham is 85.01% owned by a holding company called ENIC, which is in turn owned by Daniel Levy, the Tottenham Chairman, and Joe lewis, the British currency trader and entrepreneur, who is currently living on a luxury yacht in the Bahamas.

Of the 15% of the stock which is traded on AIM much is held by supporters of the club who will be allowed to sell their holdings for no transaction costs. They may also ask to have the cancelled share certificate returned as a memento.