Takeover row forces Dein out of Arsenal

Premiership

Thursday, April 19, 2007

By Nick Harris

David Dein sensationally left his position as Arsenal's vice-chairman last night after a boardroom row about a proposed takeover of the club by the American billionaire, Stan Kroenke.

His departure threatens a period of considerable instability, and raises questions over the future of Thierry Henry and the manager, Arsène Wenger, whom Dein hired in 1996 and who has always seen Dein as his closest friend and ally in England.

Dein is believed to be in favour of a Kroenke takeover, and it is understood that he had discussed this with Kroenke without keeping his fellow board members fully aware of developments. Well-placed sources say matters came to a head in recent days and Dein was forced out, and certainly did not resign.

Dein's departure suggests he might already have agreed to sell his own 14.5 per cent stake in the club to Kroenke, which would take the American's holding to almost 26 per cent. If Kroenke were to take his holding above 29.9 per cent, it would trigger a mandatory bid for the rest of the shares.

If that happened, it would provoke a bitter power struggle for majority control of Arsenal. The club released a statement last night saying that the remaining board members who together own 45.45 per cent " have entered into an agreement not to dispose of their shares for at least one year and have confirmed that they intend to retain their interests on the expiration of this period".

Yet that does not rule out the possibility that Kroenke could try to buy a controlling interest. Even with his 11.2 per cent, Kroenke has claims for a seat on the board, and if he bought Dein's shares, he would become the largest single shareholder and want to exercise appropriate power.

Dein would make £61.69m on his original 1983 £292,000 investment for his 9,072 Arsenal shares if he sold to Kroenke at the price that Kroenke paid to ITV recently for the broadcaster's 9.9 per cent stake. That price was effectively £6,800 per share in a deal also involving Arsenal's broadband operation.

A key question for fans worried about Wenger's future is whether Dein will regain any day-to-day power. Dein has been immersed in Arsenal, a club he has cherished almost as a personal fiefdom, for 24 years. His involvement saw him reach the upper echelons of the Football Association. He is also chairman of the powerful G14 group of European clubs. He would not want to give up such power lightly. So it could yet transpire that he forms an alliance with Kroenke, whereby Kroenke buys Dein's shares, and then hands Dein an executive position within Arsenal. That scenario could keep Wenger happy, but equally it would not resolve the long-term ownership issue.

Dein was unavailable for comment last night but it seems inconceivable that he has not shared his intentions with Wenger. The pair were seen dining together on Tuesday night at a restaurant in Islington, and the mood was described as "convivial".

If Wenger knew Dein was about to leave, it seems not to have upset him, suggesting he is content with whatever Dein is planning. But if he did not know Dein was about to go, Wenger's future could now be in serious doubt. Wenger, under contract only until the end of next season, recently stressed how much he wanted the club to keep its English traditions.

Henry is also close to Dein and his agent son, Darren, who handled his contract negotiations last summer and was also best man at his wedding.

According to Arsenal's chairman, Peter Hill-Wood, Dein left due to " irreconcilable differences" with the rest of the board. "We sincerely regret that irreconcilable differences between Mr Dein and the rest of the board have necessitated a parting of the ways," Hill-Wood said.

A club statement also confirmed the remaining board members have agreed to retain their shares "for at least one year", also with the intention of keeping them beyond that period. Danny Fiszman (with 24 per cent) and Nina Bracewell-Smith (15.9 per cent) are the key shareholders.

George Graham, the former Arsenal manager, said: "He's been a great lover of the club for years I'm feeling a bit of shock about it.

"The whole board at Arsenal are all allies of Arsène Wenger but his friendship with David Dein has always been very strong. I'm sure Arsène will be disappointed his friend's leaving."