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Confirmation the Wheels Are Turning
The announcement made by Birmingham International Holdings to the Stock Exchange was seen as anticlimactic yesterday after a day of waiting to see why the holding company had requested a halt in the trading of shares in the company. The announcement seemed to confirm nothing that hadn’t already been reported and has raised some people’s suspicions due to the ongoing secrecy around the bids.
I’ve had some time to think about it now and with that in mind I wanted to share my thoughts. As always, please bear in mind I am not a lawyer, an accountant or a stockbroker although I have asked people for advice; where I can cite facts I have done so but I would urge you to treat any and all speculation with the scepticism it deserves.
What was the point in halting trading in the shares? The announcement hasn’t changed anything.
While it has been reported in the media here in the UK that there has been parties interested in the purchase of Birmingham City, it’s not been reported in Hong Kong. BIH have a legal obligation to their shareholders to make them aware first of any news that materially affects the company such as the sale of part or all of a major asset. It’s worth noting that in the single day since the announcement was made nearly half a billion shares have been traded – when previously the trading volume was only in the tens of millions a day – and the share price has jumped by nearly 20% – although the announcement was fairly vague it was confirmation that something is happening with regards to sale of the club and reading between the lines it’s obvious that they are saying an offer has been received for the whole club, not just 24% of it.
What happens next?
The announcement talked of an “indicative, non-binding offer”. An indicative offer means an offer made on broad terms with no fine print specified; non-binding means exactly that – it’s open to negotiation. The very fact that BIH have confirmed receipt of this offer to the HKSE (rather than ignoring it as they did Paladini) means that they are taking it seriously. There will now be a period of time while BIH due the checks they need to ensure that the bidders have the money they say they do (due diligence – remember how many people moaned that David Sullivan and co didn’t seem to do this?) and if they are happy there should be another announcement to confirm a memorandum of understanding (MOU) with this party as a preferred bidder, giving them time to due their checks and get the deal done.
How long will this take?
Good question – we don’t know. I would say that time is of the essence; BIH are aware that they need to bring a new investor in and I would also say that they are very aware of the antipathy towards them from a large section of fans and the subsequent reduction in season ticket sales that could mean. It’s my guess that they will now be working hard to push the deal forwards to get the next announcement into place so that they can at least bring in a deposit of cash to firm up their own finances.
Who are the bidders?
Again – we don’t know for sure. I’ve seen lots of rumours online and I’m not going to add to them; I don’t want to endanger the process at all (or be seen to be doing that) and I think it’s better that we wait and see for sure who these investors are. The only thing I would say is that I am 100% certain that they are not Chinese and independent of Carson Yeung and BIH.
I know yesterday was a bit tough for some people who expected more but it means the deal is being done properly; it means the right checks are being made and in the long run that is what is right for the club. The wheels are now confirmed to be in motion; we just have to wait for the next update.
Tags: BIH, The Takeover
26 Responses to “Confirmation the Wheels Are Turning”
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In the meantime, stories abound today that the wage bill has to be slashed by 25% ahead of next season.
Thanks for the insights Dan. I’ve got a feeling it’s going to be a long summer.
Keep the faith.
The Daily Mirror article said that the budget was being slashed TO a quarter of last seasons, not BY a quarter. However there was one massive flaw in their report. It made out last seasons budget was c.£24m (hence slashed to 25%, c.£6m).
Now my maths is rusty but that puts about 25 players at about £20k a week… we all know (after Dan’s hard work with the numbers) that other than Zigic on £60k and a few players in the teens, there was no way that we had a £24m wage budget.
They are just trying to make a story out of nothing to make people read their poor excuse of a newspaper.
Exactly mate, trouble is those who can’t wait to add more doom onto everything are on it straight away.
Thanks OP you are number one without doubt, keep it coming please
City at £32m are a better bet than Villa at £200m.
First again with the news Dan, very well done, and I am sure that sentiment is from every true Bluenose, awaiting further updates from a first class site, and not anything from the ragtag Daily Mirror.
Great news! At last, goodbye to Clark!
Top piece as always, Dan. Impartial and Informative. Will stay tuned with fingers, arms, legs crossed
The way it’s going we’ll be asking the teams we play in pre season if we can play 5 a side games,Clark must be doing his nut ,his silence since end of season speaks volumes, even with a tiny bit of light at the end of tunnel ive never been so down about my club
Brilliant Dan, people just need to calm down and not be so quick to pile on the misery. The end of BIHL and the new beginning are now in sight
Dan, !!. I noted [ with great interest ] that you mentioned a possible ” full- buyout “, Is that a real prospect, ?. — Please say yes, !!.
British consortium with US equity fund backing, according to Bcfc. Interesting!
I’ll kill that Tom he said it was the Al Thanis
Didn’t someone else come on here and say British?
Fantastic news, no excuses now :)
The announcement on the club website just goes to show that we have to wait until we see things in black and white before we know what is truly happening. My understanding was that the alleged 2 British bids were out of the running, and now here we are with PP telling us that it is a British bid with American backing. Who knew? I have to say, now I have read that, I am starting to feel a little more positive. I guess the next hurdle is to convince the Football League that we will be a going concern next season?
Kudos again Dan but might I point out that due diligence is performed by the buyer; not the seller. Sellers, as with the ‘good honest car only driven to church on Sundays;’ are know to massage or ignore salient facts. Buyers need to protect themselves against this; hence due diligence. Normally, a buyer will have to lodge a nob-refundable break fee to get a good look at the books; it’s not a case of ‘making sure they have the money.’ BIHL/Grandtop are on record as not having the money when they said they would complete by a certain date. Caveat Emptor.
An inspired title, containing ‘wheels’. Birmingham wheels is the site for the City of Birmingham stadium, a project that may be looked at again by new owners/investors.
great job Dan!!! what is your opinion of the massive increase in shares being traded, could it be our potential new owners buying them?
Zigic was on £3million a year, and Mullins, Ambrose, and Lovenkrands on £1million a year approx(20 grand a week each, or thereabouts) and they are already out of contract so that is £6million a year saved already.
Thanks once again for the easy to read and understand breakdown.
I’m sceptical regarding your last paragraph, it means the deal is being done properly; This will be the first thing they have ever done properly.
Time is of the essence for a number or reasons and hopefully the bidders will also be aware if they are going to invest in the team before the new season.
KRO+DNM
I believe the wheels will be turning for the next two years……
They maybe indepentant of Carson but he is still the biggest shareholder…
Your right Daniel it is tough on section of supporters who dream one day that they could wave good bye to blh , but unfortunately they are living in cloud cuckoo land…..
Mark
I think you’ve misinterpreted me. But that’s not uncommon
And hopefully do away with Clark as well shame really. Does this mean they will keep their money in their pocket for next two years, you never know for some we might be on sky sports…….hopefully this is a reality check to the few……..otherwise kro