On 28 October 2014, Swansea City Football Club confirmed that it was in early stage talks with potential Buyers who were considering taking a minority stake in the football club.

The Supporters Trust position remains the same as per our statement of 29 October 2014. The Trust does not believe there is a need for the club to change ownership. However, the Trust is aware that this is an important subject of debate amongst all Swansea City supporters and wants to ensure it keeps its members as informed as possible.

To help our members, we have put together a Q&A to answer some of the frequent questions that have been asked over recent weeks. If you have other questions, then please send them to clubownership@swanstrust.co.uk and we will update the Q&A with any questions that are frequently asked.

However, due to confidentiality restrictions, please understand that it will not be possible for the Supporters Trust to answer every question, particularly if they relate to specific aspects of any ongoing negotiation.

Q1: It’s been 2 months since the club confirmed that it was in early stage talks with potential Buyers. What’s changed?
A1: In summary, not very much. Talks continue with the same interested parties but there is still no formal offer on the table.

Q2: Is the club in negotiation with more than one interested party?
A2: We have been informed that the other shareholders are only talking to one set of possible buyers.

Q3: Is this a takeover of the football club?
A3: No. Talks are continuing but the potential buyers are currently talking about taking a minority stake in the Holding company that owns the Football Club.

Q4: Is the Supporters Trust negotiating to sell any of its shares?
A4: No. The Supporters Trust owns 21.1% of the shares in the Football Club and it sees no reason to reduce its holding.

Q5: Why not?
A5: The Supporters Trust was set up with the following aims:

• To maintain a professional football club in Swansea.
• To bring football closer to its community.
• To have an elected Supporter Representative on the Board of Swansea City Football Club.
• To raise sufficient funds to buy a stake in the football club in pursuance of the above.

It is the view of the Trust Board that to sell shares in the football club would be inconsistent with the principal aims and objectives of the Supporters Trust. The aim of the Supporters Trust remains to acquire more shares in the club, not reduce its holding.

Q6: But if the new buyers take a stake in the football club, won’t the Supporters Trust shareholding be reduced?
A6: No. The discussions to date involve the new Buyers acquiring existing shares from the current shareholders, not the issue of new shares. If the Supporters Trust do not sell their shares, the current level of the Trust’s stake in the club is maintained.

Q7: Can the Supporters Trust be forced to sell its shares in the Football club?
A7: No.

Q8: So what are the Trust Board doing on behalf of its members in relation to this proposed transaction?
A8: In summary, a lot! The Supporters Trust is heavily involved as a shareholder in the Football Club. Members of the Trust Board have met with representatives of the potential Buyers on a number of occasions in order to discuss specific aspects of any possible offer.

The primary focus of these meetings is to ensure the long term protection of the role that the Supporters Trust has in the running of the football club.

There is no other football club in the Premier League that enjoys the same level of supporter participation in the important decisions taken by the football club, and it is important that the voices of our supporters continues to be heard in those decisions.

Q9: So, what do you know about these potential Buyers?
A9: As described above, the Trust Board and its advisors have held meetings with the potential Buyers in order to understand their motivations for wanting to be involved with our football club.

The Supporters Trust has also undertaken some due diligence on the potential Buyers, including instructing a third party in the USA to undertake some local research.

Q10: What did that due diligence conclude?
A10: To date, the due diligence has not indicated anything to suggest that the potential Buyers would not satisfy the requirements of the Premier League’s “Fit and Proper Person” test.

Q11: Is the Supporters Trust taking professional advice?
A11: Yes. The Supporters Trust has instructed a specialist law firm, based in London, to advise them on this matter. This law firm is separate to and independent of the law firms that have been instructed by the other shareholders in Swansea City Football Club and the potential Buyers. It is the view of the Supporters Trust board that the position of the Supporters Trust is different to that of the other current shareholders, and therefore separate legal advice is necessary.

The Supporters Trust have also engaged the services of independent legal counsel in London to advise on certain legal aspects of the proposed transaction.

Q12: If the Trust is not proposing to sell any of its shares, why do you need professional advisors?
A12: Even if the Trust does not sell shares, there will be things that the Supporters Trust will have to consider should an offer be made.

Changes to the Register of Shareholders and the Board of Directors of the Football Club (or the holding company) would have an impact on the way the football club is governed and run in the future. For example, there may be a requirement to enter into a Shareholders Agreement between the Buyers, the Supporters Trust and the other shareholders in the football club. This is a legally binding document and therefore needs to be considered carefully.

The Trust Board therefore considered it prudent to take appropriate advice, to ensure that the Trust and its members’ interests were appropriately protected.

Q13: Can the Supporters Trust veto the transaction?
A13: No. The Supporters Trust does not have a shareholding that is large enough to block the transaction from happening.

The Trust does have certain rights of first refusal over shares that are put up for sale, called pre-emption rights. However, the current price per share being discussed is such that the Trust does not have sufficient funds to exercise those rights in full.

Q14: If the Trust did sell its shares, would the proceeds of the sale go to its members?
A14: No. This is one of the issues that the Supporters Trust has specifically sought legal advice on. We are advised that we can hold the money in our bank account until such time as further shares may become available.

In the event of the Trust ever being wound up, then we could only donate any funds in the account to local charities, or another local Supporters Trust. The distribution of funds to the Trust’s membership would not be permitted by law.

Q15: Will the Trust members be consulted?
A15: Yes. The Supporters Trust board have been very clear in its negotiations with the other shareholders and the potential Buyers that time will need to be allowed in any process to allow consultation to take place with the Trust’s members.

Having taken legal advice, the Trust Board is empowered to make decisions on behalf of its members without the need for consultation. However, it is the view of the Trust Board that on matters of such importance, a consultation should take place.

Q16: How will this consultation work?
A16: The Supporters Trust currently has in excess of 12,000 members. However, the majority of these members are free members (e-members). The Supporters Trust will make some information generally available on its website for e-members at the appropriate time.

In addition, a more detailed consultation will take place with the Trust’s paid membership. As of 31 December 2014 there are 992 paid up members, and this is increasing every week. If you want to be involved in any detailed consultation and you are not currently a paid member, you will need to join the Swans Trust.

The precise nature of this consultation will be published at the appropriate time.

Q17: Will this consultation include a vote?
A17: In the event that a formal offer materialises, then it is the position of the Trust Board that the paid members of the Trust should be given the opportunity to vote on any proposals, and that the result of that vote will be a mandate for the Trust Board.

However, it really does depend on what the nature of any offer might be – there may not be anything to vote upon. As noted above, more details of the consultation process will be published should a formal offer be received.

Q18: There have been some banners at recent games which have suggested hostility to this proposed transaction. Were these Supporters Trust banners?
A18: No.