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Same As It Ever Was
Birmingham International Holdings shares rose 13% today on the back of some brisk trading which saw more than 10% of the shares listed in the company bought and sold.
It’s been a while since I’ve last written a piece devoted to the ongoing saga that has been the sale of Birmingham City FC. We’re almost into September now and we do not appear to be any closer to any conclusion than we were when it was announced that Jeremy Wray’s Soccer Management Worldwide had made an “indicative, non-binding offer” for the club.
I know from the feedback I get online that Blues fans are roughly split in two between the ones who don’t care until there is something concrete if at all (and will tell me that I shouldn’t bother posting a story like this) and the ones who want to know why I’m not posting anything about the takeover saga despite nothing happening. With this in mind I’m just going to post my overall thoughts based on the little bits I do know along with what I think – and leave it up to you to decide if you want to read it. I’m going to do that with the caveat you should treat any speculation (including what I write) with the scepticism it deserves and that I would in no way expect anyone to treat what I think as gospel truth.
First off, I do not believe that the movement in price of BIH today was anything more than speculation. From looking at the volumes traded there doesn’t appear to have been any specific trade of more than 40million shares at any one time which to me suggests that there wasn’t any major movement in shareholding by any major shareholder. The change in price reflects the volatility of stock when it is worth so little per share; even a small change in the tenths of a penny is a decent percentage change of the value per share and thus I think nothing should be inferred from the stock price rising 13% either.
Some sources I know have told me that they can’t see a deal being done this season. I don’t know if that’s natural pessimism or cynicism, or something based on harder facts. My own personal opinion is that nothing can happen at the moment because of issues surrounding regulatory approval and the current investigation into BIH. As much as I think people want to believe BIH are deliberately holding things up I’m not sure that is true – I cannot see what benefit hanging on to the club has for BIH as I can’t see that they are receiving any amount of cash from the club that makes it worth the effort.
I think a concluding a deal to buy the football club is going to complex because of the problems BIH has – BIH is holding on to it’s main board listing with all its might because of the intrinsic value of the listing itself (circa £30-£40mil) and it cannot remain a listed company unless it has another business in place when Blues is finally sold. Although we are currently waiting for the accounts to come out I suspect that they will continue in the same vein as they have been – ie that the company has little to no money in the bank to purchase another business. Until BIH manages to convene an EGM to allow the selling of a convertible bond to bring in more money they will remain in that impasse; at the moment the details has been held off until 10 September which would mean an EGM would likely be the end of that month.
With the wage bill now fully under control following the departure of Nikola Zigic – and money coming in from the transfer of Tom Adeyemi plus the sell-on fee for Jordon Mutch I can’t help but be sure that the club are probably secure financially this season. The problem as I see it is that while I don’t think revenues can shrink a vast deal further I can’t see us being able to grow as a football club without outside investment. In other words, I think we could probably continue for a fair while as we are without worrying about administration but I doubt we’d be more than relegation battlers without any money coming in.
I’m aware that’s a bit of a gloomy picture but I think it’s a reality many clubs face – that without a significant amount of money dropping into their accounts or some real genius of inspiration on the pitch overachieving is going to be very difficult – and even then if a club does well it could be stripped of it’s talent as Southampton have found in the close season. That is the nature of the commercialisation of football and without a paradigm shift to a different model of league it is the way it will remain for the foreseeable future.
Tags: BIH, The Takeover
15 Responses to “Same As It Ever Was”
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Well Dan I have tracked the share price and trading for a considerable time now and every time a considerable amount of shares are traded then something has been going on in BIHL. Whether that is to with Blues or not is open to debate and because the information flow from BIHL is tighter than a ducks rear end we will never know. But I would expect an announcement HKSE style to give a glimpse of what is happening probably the date being set for the EGM but nothing more. The 13% jump has bucked the trend for the share price which has been on a gradual downward spiral since the announcement of the bond conversion in principle. I think the share price is required to be at a certain level in order for any conversion to take place and this may be part of the reason.
As with all things I might be well wide of the mark as these are only my opinions and I know nothing.
Hello Dan – your pieces on the nature of Blue’s standing in Honk Kong is nothing short of amazing – intelligent, informative and always eloquently put – an absolute must read for so many of us Bluenoses, every word you type on the subject much appreciated.
There is not much that the ordinary fan can do except be patient and support the club wholeheartedly – the wheels are turning albeit ever so slowly and relief will come at some point…
I entirely agree.
Please keep us up to date Dan and ignore the critics.
It’s very difficult to accept the continued demise of our great club but everything has to come to an end eventually.I also entirely agree with your comments concerning the clubs ability to survive and without any investment that’s all we can expect at the moment-survival.
Has the previous owners business interested in Macau suffered by court restrictions?
As I understand it we at the same point we have been for a while BIHL will not sell Blues until they “own” another company within the BIHL “umbrella” so to speak as if they sold Blues now they would lose their listing on the HK stock exchange. Which I don’t know if that’s a big deal but it clearly is to them. Didn’t they put a bid in to buy some Gas/Oil company some time ago and pretty much when that is confirmed they were in a position to sell Blues. That’s where I thought we were on the sale and until that happens it rolls on as it is.
Great to hear some backgound news at last, I join the other posters [ so far posted ].
As much as it hurts that we are unable to make changes, — Managerial or playing staff, with no investment from outside sources forth coming, at least we can ” soldier on ” for this season, — would love us to be able to do more than that though, !!.
Yep Daniel I think this sums it up nicely. I have been saying for a while BIHL don’t need to sell us now that we are on a shoestring budget and not causing a financial drain on the business. Providing we avoid relegation every season BIHL ownership could last for years! The only thing that will cause a change is impending relegation or a daft bid from someone with more money than sense because at the moment they’d need to buy a massively overpriced BIHL as a whole. Who’d really want to pay a £30m -40m premium for a HKSE listing !!?? Only another Chinese owner or dreamer. Of the options to continued shoestring budgeting impending relegation looks an interesting option.!
Once again Dan you provide us with an insight to events in Hong Kong, you really do leave the local media in your wake, thanks and keep the updates coming.
As it stands nothing has changed much, Jeremy Wray’s consortium are keeping quiet so maybe they are still hoping they can come to some compromise or I would have thought they would come out and state the deal is dead?
I just wonder if Carson Yeung still has an input since he is still the biggest shareholder, possibly another reason why things are dragging on re the bond conversions?
As it is we just continue to support the team, unless one of us has a spare £40 Million down our sofa there is not much we can do.
KRO+DNM
When is the book coming off the presses Dan?
I still don’t get why you think that the listing is worth £30/40m? Any business can list on the HKSE as long as they fulfill certain requirements. Even BIHL managed to fulfill this so can’t be that difficult. The listing fee is also based on the monetary value of equity securities to be listed.
with the st sales done better than expected, and venue from player sold previously, along with transfer money from mutch…….administration was never going to be on the cards imo…..all bluenoses want stability for our club….better to keep the devil you know than the devil you dont know lol
on a more brighter note glad to see our young pups nick townsend and koby Arthur putting in a shift for their prospected loan clubs….the future bright……
On an even brighter note Blues Under 18’s beat Sheffield Wednesday 9-3 away!
As we appear to be safe financially for this season and as long as we win more more than we lose we just soldier on then! The chinese might get some money from the sale of a convertable bond and we might be released from the financial impasse we find ourseleves in. Things could then change rapidly. I might win the EuroMmillions and buy it myself. You can have a seat in the main stand for free if I do Dan, along with Chris W and Staffs Blue. Possibly a few others! KRO
What a gent. :-)