Financier Dermot Desmond will be one of the main beneficiaries of the decision of Glasgow Celtic Football Club to seek a full listing for its shares on the London Stock Exchange. However, as most of his shareholding is in convertible preference shares, it could be some time before he realises the full benefits. Nevertheless, it is proving to be a very shrewd investment. Dermot Desmond bought an effective 13.8 per cent in a placing of new shares in 1995 for £4 million sterling. The proceeds from the fund raising were used to bring the club back into profits.
Chairman, Fergus McCann, who put up £9 million, steered the club to the Scottish premiership title for the first time in a decade, and provided it with the largest all-seater (60,000) stadium in Britain. The paper value of Dermot Desmond's investment has quadrupled since he made it. That holding is valued on London's Alternative Investment Market at £16.1 million, giving him a paper profit of more than £12 million. And the full listing will make the shares far more marketable. At £245, investment in the shares on AIM is off-putting. A 100 to 1 share split, just prior to the listing, before the end of the year, will make the shares look palatable at 245p.
Dermot Desmond has 14,393 ordinary shares, or 5 per cent of the total, which he purchased at £64 per share. He also has 51,313 convertible preference shares which cost £60 per share. While these shares pay a 6 per cent dividend (there are no dividends on the ordinary shares) they are not convertible until June 31st, 2001. Celtic founded in 1888 by Brother Walfrid, a member of the Marist religious order, is 110 years old a three-year wait is decidedly brief.
