Dispute on Shareholder Rights at Galatasaray
A recent note on the dispute is coming from www.footballeconomy.com; several investors in the merchandising arm of leading Turkish club Galatasaray are locked in a dispute with the club's owner over minority shareholding rights. These investors, including several London-based fund managers, object to a proposal by the club's unlisted parent company to merge the merchandising division, known as Galatasary Sportif, with its footballing side. They claim that such a move, among other things, contradicts statements in the prospectus issued when they invested in the division that ring fenced its revenues from those of the rest of the club. QVT Financial, a $5.5bn investment management firm, that owns about $20m of Galatasary Sportif stock, has complained to the Turkish market watchdog, the Capital Markets Board. The firm, and other shareholders, want the watchdog either to block the merger or to order the parent company to buy them out at the price the stock traded at before the merger was proposed last summer, which is at least 50 per cent higher than its current share price. QVT says the CMB's approach to the merger proposal is a crucial test to verify the Turkish market's reliability in the eyes of international investors, but the watchdog seems to be more inclined to view it as a dispute between shareholders which may not break any laws.
Sportif AS was established in 1997 to manage all marketing activites of Galatasaray Sports Club. The company generates majority of its revenues from the sale of media rights of hte Sports Club.
Several share classes exist and the main difference between the share types is the nomination to the board and auditors. B type shares have no privileges, while A and D type shares nominate 6 and 1 members, respectively.
37.0 % of shares are publicly traded, all are B type, and 18.2 % of free float is owned by QVT, a UK based fund.
