Community Ownership:
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The 'Big Bath City Bid'
In January 2015, the Supporters Society launched the "Big Bath City Bid", a three month campaign over the summer of 2015 that raised over £300,000 of pledges to buy community shares. The Big Bath City Bid team attracted interest from local business leaders and range of individuals and organisations.
The Bid fell short of the £750,000 target set by the majority shareholders of Bath City FC, but the shareholders made a fresh commitment to transition Bath City FC to a community-owned club in December 2015, if and when a planned ground redevelopment clears the club's debts. The Big Bath City Bid team relaunched the bid under a new prospectus in September 2016. In just 28 days, the new bid raised over £320,000. This allowed the Society to become the club's controlling shareholder, holding 55% of the Club's voting rights and a majority of seats on the club board. Our ultimate goal is to convert the entire club to a members-owned Community Benefit Society, much like the existing Supporters Society. Our members will then vote on whether to merge with the new community-owned club. |
What the proposed deal would mean for community shareholders
Summary
In 2016, over 550 people purchased community shares from the Supporters Society to safeguard the club's future, raising around £365,000. The Society used these funds to buy a majority stake in the ordinary shares of Bath City FC Ltd, paying £1 a share, as well as investing in the club's budget.
Ten years on, the Society is now proposing to sell its entire majority stake to an investor group in order to unlock £6m of new investment into the club. The proposed deal has been a long time in the making, and we believe it offers the only realistic opportunity to avoid a continued decline, with no practicable solution to repay the debt or to maintain and improve our stadium.
Despite our best efforts during negotiations, however, the proposed sale price of the Society’s shareholding in the Club’s ordinary shares (1p per share) would not realise enough funds to cover the repayment of community shares.
All shareholders in Bath City FC Ltd, including the Society, would receive 1p for each ordinary share. This would leave the Society with approximately £4000 from the sale, far short of the £365,000 needed to repay its community shares.
In practice, this means community shareholders should not expect any repayment of their shares if the proposed deal is approved. The £365,000 raised in 2016 will not be recovered.
We understand the disappointment this will bring to everyone who dug deep to support the community share offer, but the simple fact is that we could not have secured the proposed deal if we had insisted that the prospective buyers cover the cost of repaying community shares.
Further background and FAQ
Community shares vs ordinary shares
There are currently 800,000 ordinary shares in Bath City FC Ltd. The Society owns 400,226 ordinary shares and controls a further 49,016: a total of around 449,242 (56%).
To obtain this shareholding, the Society sold community shares to supporters in 2016, raising around £365,000, of which £300,000 went towards buying ordinary shares in Bath City FC Ltd, and £65,000 was invested directly in the club’s operations.
In other words, the Society issued community shares so that it could buy ordinary shares in Bath City FC Ltd. If you hold community shares, you hold them with the Society rather than in the club.
The 2016 “Big Bath City Bid” community share prospectus
The original plan was to clear the club's debts via a redevelopment, purchase further shares to take the Society's stake to over 75%, and return the club to profitability through the business plan set out in the 2016 "Big Bath City Bid" community shares prospectus.
The 2016 prospectus stated that, before the Society could start to repay community shareholders:
These conditions have not been met, primarily because planning permission for the proposed redevelopment was turned down in 2020, leaving the debts outstanding. Despite the best efforts of the club board to explore alternative redevelopment options since 2020, no viable route to clearing the debt has emerged until now - meaning that any repayment of community shares remained a distant prospect.
If the club is being offered £6m, why can’t it afford to repay my £250 of community shares?
To repay all community shareholders, the Society would need to receive about £365,000 from the sale of its ordinary shares - that is, at the price of £1 per share it originally paid. If the Society receives £1 per share, other ordinary shareholders would reasonably expect the same. As there are 800,000 ordinary shares in Bath City FC, this would require the prospective investors to spend £800,000 on buying shares. As per the Q&A shared by the club on 7 August, the prospective buyers “have always been clear that their priority is to invest as much money into the club as possible.”
What would happen to my community shares?
If the proposed deal goes ahead, community shareholders will continue to hold their community shares issued by the Supporters Society, although there will be no realistic chance of repayment. Members will have the opportunity at a future date to decide whether to keep the community shares “on the books” of the Society, write down the value of the community shares, or otherwise cancel them.
The proposed deal offers 1p per share. Would community shareholders receive 1p per community share?
The “1p per share” of the proposed deal applies to ordinary shares in Bath City FC Ltd rather than community shares issued by the Society. It would be up to members to decide in the future whether they want the Society to use the funds it receives from the sale of its shareholding to repay community shareholders at 1p per share.
Summary
In 2016, over 550 people purchased community shares from the Supporters Society to safeguard the club's future, raising around £365,000. The Society used these funds to buy a majority stake in the ordinary shares of Bath City FC Ltd, paying £1 a share, as well as investing in the club's budget.
Ten years on, the Society is now proposing to sell its entire majority stake to an investor group in order to unlock £6m of new investment into the club. The proposed deal has been a long time in the making, and we believe it offers the only realistic opportunity to avoid a continued decline, with no practicable solution to repay the debt or to maintain and improve our stadium.
Despite our best efforts during negotiations, however, the proposed sale price of the Society’s shareholding in the Club’s ordinary shares (1p per share) would not realise enough funds to cover the repayment of community shares.
All shareholders in Bath City FC Ltd, including the Society, would receive 1p for each ordinary share. This would leave the Society with approximately £4000 from the sale, far short of the £365,000 needed to repay its community shares.
In practice, this means community shareholders should not expect any repayment of their shares if the proposed deal is approved. The £365,000 raised in 2016 will not be recovered.
We understand the disappointment this will bring to everyone who dug deep to support the community share offer, but the simple fact is that we could not have secured the proposed deal if we had insisted that the prospective buyers cover the cost of repaying community shares.
Further background and FAQ
Community shares vs ordinary shares
There are currently 800,000 ordinary shares in Bath City FC Ltd. The Society owns 400,226 ordinary shares and controls a further 49,016: a total of around 449,242 (56%).
To obtain this shareholding, the Society sold community shares to supporters in 2016, raising around £365,000, of which £300,000 went towards buying ordinary shares in Bath City FC Ltd, and £65,000 was invested directly in the club’s operations.
In other words, the Society issued community shares so that it could buy ordinary shares in Bath City FC Ltd. If you hold community shares, you hold them with the Society rather than in the club.
The 2016 “Big Bath City Bid” community share prospectus
The original plan was to clear the club's debts via a redevelopment, purchase further shares to take the Society's stake to over 75%, and return the club to profitability through the business plan set out in the 2016 "Big Bath City Bid" community shares prospectus.
The 2016 prospectus stated that, before the Society could start to repay community shareholders:
- The club must clear all debts from directors' loans (which the Society expected it to be able to do via a partial redevelopment of Twerton Park).
- The Society must raise enough funds to acquire a 75% shareholding in the club and convert it to a community benefit society.
- The club must return to operational profitability.
These conditions have not been met, primarily because planning permission for the proposed redevelopment was turned down in 2020, leaving the debts outstanding. Despite the best efforts of the club board to explore alternative redevelopment options since 2020, no viable route to clearing the debt has emerged until now - meaning that any repayment of community shares remained a distant prospect.
If the club is being offered £6m, why can’t it afford to repay my £250 of community shares?
To repay all community shareholders, the Society would need to receive about £365,000 from the sale of its ordinary shares - that is, at the price of £1 per share it originally paid. If the Society receives £1 per share, other ordinary shareholders would reasonably expect the same. As there are 800,000 ordinary shares in Bath City FC, this would require the prospective investors to spend £800,000 on buying shares. As per the Q&A shared by the club on 7 August, the prospective buyers “have always been clear that their priority is to invest as much money into the club as possible.”
What would happen to my community shares?
If the proposed deal goes ahead, community shareholders will continue to hold their community shares issued by the Supporters Society, although there will be no realistic chance of repayment. Members will have the opportunity at a future date to decide whether to keep the community shares “on the books” of the Society, write down the value of the community shares, or otherwise cancel them.
The proposed deal offers 1p per share. Would community shareholders receive 1p per community share?
The “1p per share” of the proposed deal applies to ordinary shares in Bath City FC Ltd rather than community shares issued by the Society. It would be up to members to decide in the future whether they want the Society to use the funds it receives from the sale of its shareholding to repay community shareholders at 1p per share.
Repaying Investors
The Society, not the Club, will be responsible for eventually repaying investors but before this…
The key risks to the repayment of community shares are therefore:
The Society, not the Club, will be responsible for eventually repaying investors but before this…
- the club must clear all debts from directors’ loans, which we expect it to be able to do via a partial development of Twerton Park
- the Society raise enough funds to acquire a 75% shareholding in the club and convert it to a community benefit society
- The club must return to operational profitability.
- In particular, we must stress that, unless and until the Society is able to secure full control of the club and convert it into a community benefit society, the shares in the Society cannot be withdrawn and will not receive any interest.
The key risks to the repayment of community shares are therefore:
- The club being unable to realise a financial windfall via a partial redevelopment
- The Society being unable to achieve a 75% stake in the club because it cannot raise sufficient funds (both through this community share offer and other future funding sources) to purchase the current majority shareholders’ remaining shares
- The Society’s business plan failing to return the club to long-term operational profitability
