It’s not clear exactly what Albert Alexander said to his vice-chairman, Frank Johnson, during the ‘stormy’ board meeting that took place on Tuesday 24 November 1969. But a day after revealing he was selling his 25% stake to double glazing tycoon Joe Smith, Johnson announced that he had now changed his mind. “Had I known these people were involved I would never have entertained the idea of transferring my shares,” Johnson claimed.
Smith, who had already paid a £50,000 deposit to Johnson, insisted the sale was legally binding. However, he suspended plans for a formal takeover of the club until September 1971, when the final payment to Johnson was due.
The delay left Allison in a precarious position. “I’m not involved in the takeover and the last thing I want is Joe Mercer’s job,” he told the Daily Mirror on the Wednesday.
His denials rang as hollow as Johnson’s. In Colours of My Life, Allison recalled,
‘I took the players for a short training session on the Friday afternoon. We were due to play Leeds United at Elland Road the following day. The players were a little hostile towards me. Francis Lee, Mike Summerbee, and Colin Bell came to me and said, 'Why try to change the club, Malcolm? We have done well. You do not change something that works'. I was very much out on a limb.’
Later that day Allison was summoned to an emergency board meeting to explain his actions. It ended with an unnamed director warning of “drastic” action if they weren’t “one hundred per cent satisfied” they had his support. None of the directors travelled to Elland Road that Saturday. After the match they summoned Allison to another emergency board meeting and informed him he was being sacked.
What happened next astonished everyone at Maine Road. After hearing of Allison’s dismissal, Mercer confronted Alexander and issued an ultimatum: “If he goes, I go.”
After extracting a face-saving promise from Allison that he would not become involved in the "political side of the club's affairs”, Alexander relented.
With Johnson’s shares locked away in his lawyer’s bank, a Christmas truce was called. As a goodwill gesture, Smith had even offered to make Alexander chairman for life should the takeover be successful. But in reality, both sides were busy planning their legal strategies. The club threatened to issue a ‘huge new block of shares’ to block a takeover. Smith, whose legal team had ‘prepared a list of eight alternative courses of action which could be taken by the board’, was confident he could prevent it.
On 4 January Johnson handed over 508 shares (25.4%) to Smith for £110,000. Smith, who had also bought 100 shares from Muir, was now the club’s biggest shareholder.
It was time for Alexander to reveal his hand.
On 6 January the club announced that an Extraordinary General Meeting would be held on 8 February. At the EGM a resolution to bring 300 “missing” shares into circulation would be proposed. Those shares would be placed under the control of Nigel Howard, a former England cricket captain and committee member of the Lancashire County Cricket Club.
Later that day Smith held a press conference at his Prestbury home. After claiming that their lawyers had found the board's proposals to be invalid, he announced that his takeover group would propose their own resolutions at the EGM. These would call for Albert and Eric Alexander, John Humphreys and Sidney Rose to be replaced by Smith, Simon Cussons, Ian Niven and Michael Horwich.
However, Smith also struck a conciliatory note:
“We started this campaign eight years ago. At first we hoped to expand the board to nine and work together with the present board, but our efforts to get together for the benefit of the club had been turned down.
We will go along with the present board or without them. We are willing to put forward a scheme to work with the majority of them.”
But Alexander was in no mood for peace offerings.
The following day, during a 4½-hr board meeting that Johnson didn’t attend, Johnson was stripped of his vice-chairmanship and replaced by Rose. The club also announced it would be launching legal proceedings to prevent the sale of Johnson's shares, arguing it was in breach of the Deed of Covenant signed in 1964.
City's solicitor, Frank Shepherd (pictured above), was sent to London to build their case. On 14 January, following a meeting of lawyers representing both parties, Alexander revealed the explosive details of their new strategy. The club now planned to remove Johnson from the board at the EGM. But Alexander also told the Evening News,
“The company’s barrister and new solicitor advise provisionally that this covenant of October 5, 1964, is still in force.
“They also advise that a deed of release prepared by Mr Johnson, with my approval, which we had executed on March 5, 1968, was not effective and did not result in a release.”
If the courts ruled that the 1964 covenant was still active, and Johnson was removed from the board at the EGM, then Alexander would have a legal claim to Johnson’s 25% stake. That would leave him with a majority of the club’s shares—and make a hostile takeover impossible.
On 22 January, at the Chancery Division of the High Court in London, Johnson undertook to delay the transfer of 500 of his shares until the trial. He also promised that the voting rights on those 500 shares would not be exercised ‘on any resolution to remove any director from the board, or reduce the number of directors or appoint any further directors.’
However, the court ruled that Johnson was still able to use his shares to prevent his removal from the board and to block the issue of new shares. It was a situation that guaranteed more deadlock.
At the EGM on 8 February, the resolution to appropriate the “missing” shares (now revised down to 200) was defeated by 914 votes to 723. Another resolution to replace Johnson with Howard also failed by 915 votes to 771.
By now the boardroom unrest appeared to be affecting events on the pitch. City suffered early exits from the League and FA Cups that season, while a League campaign that began with six wins and two draw in the first eight games ended with just one win from their last 19 games.
And with club solicitor Frank Shepherd warning that the trial could be up to 12 months away, a sense of malaise was beginning to set in.
Earlier that year several newspapers had claimed that a mystery backer wanted to put money into City. Club secretary Walter Griffiths was tasked with establishing his identity. He discovered that the mystery benefactor was a rising star in the football world, who was now offering to help break the deadlock.
And his name was Peter J Swales.
Part 4