Watford are to make 10% of the club available for new investors at an offer price which values the Hornets at £175m.
However, the new investment will not come from one person or an organised group such as a private pension fund, but instead via individuals through digital equity.
The Watford Observer understands that this opportunity is not connected to any investment groups rumoured to be interested in taking a stake in the club in stories that have appeared in the last 18 months.
The Hornets have pledged that a portion of the money raised will go towards funding player recruitment for new head coach Tom Cleverley.
A proposition such as this means there is an opportunity for fans to also be involved and own shares in the club, alongside other investors.
In addition to the digital equity, there will be the option to receive tokens and access exclusive offers, with plans to facilitate the future trading of the tokens.
“In common with many other clubs, we have been exploring opportunities to bring investment into the club to grow the club further and bolster revenue streams which, in turn, allow us to strengthen the playing squads,” Watford said in statement.
“Having looked at a number of options, we have decided to take the exciting and innovative step of becoming the first major English club to offer true ownership through digital equity. Digital equity is an easy and practical way to access shares in the club.
“Put simply, we are aiming to offer approximately 10% of the club at a value of £17.5million, on the basis of a club valuation of £175 million. Having posted a pre-tax profit of £24.1 million for the last financial year, the highest in the EFL, we believe this is a fair valuation of the club.”
They go on to say that the valuation “is based on a comparative analysis of clubs of similar stature that have recently completed whole or partial equity transactions”.
When Birmingham City was sold to Shelby Companies Limited, owned by American businessman Tom Wagner just over a year ago, they reportedly paid around £35m for 45.6% of the club’s shares.
That being the case, the Blues were valued at a figure around £77m at that time. They have obviously been relegated to League One since then.
More recently, Ipswich Town sold a 40% stake in the club to US private equity fund Bright Path Sports Partners for up to £105m in March.
That put a valuation of £262m on the Tractor Boys, who have since been promoted to the Premier League.
The club are working with Republic, a leading online investment platform, who have vast experience in digital equity offerings, having led similar projects in football previously.
Shares will be available for purchase on both the Republic platform and Seedrs, Republic’s platform in Europe, in either sterling or dollars with no necessity to purchase via cryptocurrency, like traditional share sales.
The price per share has been set at £12.44 and the minimum investment is four shares totalling £49.76 for investors purchasing their shares through the Seedrs platform, and eight shares totalling £99.52 for investors purchasing their shares through the Republic platform.
Once the shares have been purchased, there is a lock-up period of 12 months before trading is allowed.
“Part of the funding will be channelled into recruitment to strengthen Tom Cleverley’s playing squad as we seek a return to the Premier League,” the club added.
“We believe this project can form a key strand of football’s future finance, where investors and supporters alike can enjoy the fruits of the club’s future success.”
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