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Good News or Bad News
Birmingham International Holdings announced to the Hong Kong Stock Exchange that they have shortlisted one of seven bids received. It was confirmed that the bid was for a stake of BIH and that they have also received a letter committing funding to BIH and BCFC ahead of the new season.
As one can imagine, it’s been a pretty popular subject as for the first time in twelve months BIH have confirmed that they are in negotiations. I think it’s fair to say that there has been some disappointment online – firstly that the bid is for a stake in BIH and not for the club, and secondly that details are so scarce.
There has also been a lot of talk about the nationality of the consortium bidding. I’ve been asked on more than one occasion about this sort of question and while I don’t feel there is any importance in it I can sense that it is to some people with some of the more shrill posters on forums and social media declaring that they just see any potential Chinese bid as a continuation of the Yeung era.
While I cannot locate any details on either who the bid is from or who has loaned the money, I wouldn’t be surprised personally if the money did indeed come from Mainland China. The fact that a bidder has offered money for a stake in BIHL leads me to assume (rightly or wrongly) that they are interested in the listing on the HKSE rather than the club. If that is the case then I think we could potentially see the club sold seperately a little further down the line – something I know wouldn’t please people but would be easier to deal with if another business is brought under the wing of BIH when the stake is bought.
As much as I understand the suspicion surrounding bids – it’s not like we haven’t seen iffy circumstances before after all – I would make it plain that I don’t believe the same will happen this time. Carson and Pannu have both issued legal action against Ernst and Young and as such I can’t see either wanting to work with them whatsoever – and so it follows that any bidder wouldn’t be related to Carson or Pannu for the same reason.
I think the other big question is if this will be sorted out for the new season – and the answer to that question I believe is no; however that isn’t necessarily awful news. Panos Pavlakis made it clear in his last programme notes that money was there for players – and with funding secured (albeit against the ground) that would appear to back up that statement.
If – as I suspect – the bidders and the company making the loan are one and the same people then that could be a good thing, with the bidders making a commitment to bring in money first to help the process along. However, the last thing we need is debt leveraged onto the club during a takeover and I think it’s something that we need to keep an eye on as things continue.
In short – people have asked if it is good news or bad news and the simple answer is that it’s too early to tell either way. All we can do for now is sit and wait – and know that we will hear more by June 8.
Tags: BIH, Carson Yeung, Ernst and Young, Peter Pannu, The Takeover
47 Responses to “Good News or Bad News”
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i don’t want any part of this £13 million spent on wages or players as when it is wasted and spent we are back to the point we are at now minus St Andrews.
Having the ground as an asset is what we need for a very rainy day, not to recklessly give it away on average players who may or may not perform.
Agree,Its far to risky for what is not a great amount
nt of money
What is to stop the loan/invested monies being spent elsewhere and by that I mean Blues.
Is it conceivable the debt is secured against St Andrews and the club not see penny of the loan?
On the one hand I’m pleased to see we have made progress in the last 12 months and that Carson and Pannu appear not to be running the club or its finances.I do however have real concerns about the latest development and lots of questions come to mind.
Who are the bidders?
What is there real intention.
Who were the other bidders and why do EY prefer Trillion.?
The fact that to date no one appears to know who the bidders are is really concerning.
Art
If you have an inkling the club could be sold seperately down the line, would you break cover and lose the chance?
Nope, neither would I. Patience.
Fair point .
Why the lack of transparency?
This is my main concern.?
Because that’s the way it’s done – to make a purchase like this you need to sign an NDA (Non-Disclosure Agreement). I know it sucks, but that’s the way it is – privacy has to be maintained.
I think we should trust Ernst and Young with this one.They’ve done a good job so far.
I think I would feel more relaxed about all of this, if it was an English branch of Ernst & Young who were dealing with it !
If this is the only way to get new owners then so be it.It sucks but there is nothing us supporters can do about it.
Be Risky next new season 215/6???… Our biggest problem may not be with players however: Rowett is supposedly the target for a number of clubs, and who can blame them after this campaign. Derby could come in for him if Steve McClaren goes to Newcastle, and Rowett may well jump ship: Blues are still a club with an owner in prison, and a limited transfer budget. We must hope that he stays loyal for at least another year….. Also man utd wanting interesting to buy to young player Gray 18 year old only he be worth between £15-18M young player and he fast skill……I remember who team Arsenal buyer to name is Walcott £8M 17 year old from southhampton 2005’s… Must sell player high rent NOT cheap sell and waste of time….
Can I suggest a new phrase – ‘Better the devil you don’t know’ ?
From the shareholder point of view. Another step towards getting the company floated on the Exchange, This way could EY are going mean CY and cohorts can’t stop or interfere, would say with courts permission General meeting next stop, I still think as I said last post it’s a Chinese group with money and a plan waiting to move in, Blues are on it’s way up, on and off the pitch, money will be there for players, One possible problem, with time running out to float on the Exchange again, just hope CY does not delay General Meeting to rubber stamp it all going though.
Very salient point.
I have heard one of EY’s principal aims is to get BIHL relisted…
Time isn’t running out though, not at all.
The bottom line is no-one knows if this is good or bad news.I am really uncomfortable with St.Andrew`s being used as security because if our financial position worsens (and it might) we could lose it. Oh and last time i looked CY was still major shareholder and didn`t want to sell the club so expect him to be around for a long time as i have been saying for months.
The fact that Blues/BIHL have banked £7m in spite of the financial mess these last few years, must mean that the club as a business is doing well. Yes, in order to push on further we need to sign new players and pay more wages. But, better results, bigger crowds, longer cup runs (perhaps) may help offset some of the extra costs.
I imagine that a potential buyer (from anywhere) would know this already, even if they were just after BIHL for the listing. I’d hope they would take better care of Blues as they are currently a solvent business, even if it was only for a short time before selling.
A better cared for Blues would ultimately mean they could make more money on a sale. Selling Blues 2/3 years ago would have been a very different conversation.
I also have faith in EY to know who they are selling to and make a proper mutually beneficial decision for the club and the new owners (and perhaps the fans)… Unlike the Brady bunch who clearly didn’t know or care who they got their £80m from.
Perhaps I am too optimistic at times. But in 2013/14 I was convinced we wouldn’t be relegated. Optimism works occasionally :)
Agree with that. The clubs looking as healthy as it’s been for a long time and could be an attractive proposition to a potential buyer. More so because I don’t see us having to spend that much in the summer to be competative and if we could bring in the loanees on a permanent basis plus a striker I would take it. There is also the added fact that with E&Y overseeing the situation future investors can have more confidence in everything being above board which is everything in a situation such as this.
if I were an investor Blues would be a great investment!… we can all see they are not too far away from been a top four club, with that in mind, a bit of player investment could well achieve promotion and a £120M windfall!
All I can say is I hope this investor can/has the ability to blow Carson et al out the water!
In PP2 I trust, imho I believe he is the instigator in the removal of PP&CY . It is he that has brought the present situation into being, so lets just wait and see what happens .It’s out of our hands, so lets be patient Kro4ever no matter what
There’s one thing that doesn’t quite add up.
Dan, you mentioned that, at the Blues awards dinner, you saw a member of one consortium talking to members of the Blues board.
Now we hear that E&Y were only interested in selling a stake in BIH, not the club.
Why would an individual involved in a bid to buy a controlling stake of the holding company (primarily for the intrinsic value of the listing) be attending the awards dinner?
Perhaps the potential bidder is also a Blues fan in which case why wouldn’t they be at the Awards Dinner?!!
Luke
Firstly you assume that the person I saw is involved in the winning bid. I’m 100% sure they’re not.
Secondly, people attend these things to hobnob and network – it’s not just about football…
Surely any buyer of the club would be owners of St Andrews and therefore it would always be used as the prime security in any bank lending arrangement. Banks will not lend without security. If St Andrews is not available as an asset for bank security then we are almost in the same boat as a “Leeds Utd” type club that doesn’t own the ground and has had great difficulty as a result in finding suitable owners as a result. I think those providing the collateral loan arrangement must be connected to the proposed bidders.
I’m wondering if this investor was at the end of season dinner and rewards. Aslo been seen speaking to the B.C.F.C broad there most be some interest in the full package. We all have to wait and see what happens with the investor and what their plans are with BIH & if they are going to invest in Birmingham City. No one knows what going to happen.
I’m categorically sure it’s not the person I saw.
Daniel you divulge very little to us of what you know why?
Because some things can’t be disclosed in the public domain.
Sorry.
Dan I’ve trusted your gut feeling for last couple of yrs and you e mainly been proven correct.
So what’s your gut feeling on this good or bad
I’m in the middle at the moment
Rhees – as I said in the article, too early to tell…
Ok Dan cheers more waiting and see then
The Blues Trust state “St Andrew’s has been registered by the Trust as an Asset of Community Value – in normal circumstances this provides restrictions on the timing of any sale allowing the Trust or other community groups to bid. However, it is our understanding that these rules do not apply if the land is sold by a person having the power of sale by way of security for debt”.
So we need this £13 million to be spent very wisely by BIHL / E&Y for ‘working Capital’.
Will this be to pay E&Y if only in part payment and to pay The new E&Y directors of BIHL?
If a deal goes through it may not be an issue, but if it fails, the St Andrews will pick up the tab.
How much will re-listing of BIHL shares cost us cost i wonder.
Will any of this money be used to pay off China Energy?
E&Y’s staement has just caused more questions and uncertainty now they have dragged our largest asset into the fray.
On a slightly different note, reports that Morrison would quit Blues given the right offer is of no surprise. Though Gary Rowett has dismissed such claims, there is no smoke without fire and unless money is pumped into the club to pay players decent wages then the likes of Gray and Randolph will wait for other offers, that seems to be the case right now.
not everybody is motivated by money some people play football for the love of the game and are glad with what they get.
This Morrison and Gray business will tell us the whole story. Should they go, then we know EXACTLY where we are. No summising,no speculating,no wild guesswork. Just plain facts for the layman to understand. If they go,then Tesche and Fabbrini is a foregone conclusion. nuf sed.
Andy if proper money is offered for Gray and Ranolph I would take it.Lots of promising lads fail to make the grade and there are plenty of more consistent goalkeepers out there.GR has shown he has an eye for good players -Tesche and the bloke beginning with F who I always wrongly refer to as Felani.Sadly E and Y have the job of getting maximum value.The best way of doing this is to get the listing sorted and then flog it.Someone will reverse a company or fund into it.As a lifelong Blues fan this is frustrating but its what must happen.Some very credible suitors were turned away by E and Y..Fact. The reason being clearly that they have the fiduciary duty to maximise the value of the whole shooting match and not just our beloved club.
No money will be offered for Randolph, he will be out of contract!
I stand corrected!
Why would anybody buy Blues, or any other Club for that matter? No matter who they are or what their Nationality I will seriously question their motives. Money is the biggest motive in my opinion….so how would they make it? Do they hope to buy low and then sell high? (Gold & Sullivan). Do they intend paying themselves massive salaries and damn the Club? (Oystons at Blackpool). To asset strip (Weldon) or to sell clothing (Kumars)? Personally I would settle for the Gold&Sullivan-style ownership because profit only really follows success.
I can’t remember who said it now, may even have been Mike Ashley up at Newcastle but I’ll paraphrase for sake of not remembering the proper quote: “No businessman ever buys a football club for profits. There’s no money to make, it’s all for the ego trip.”
I think that is…or certainly was…the case at certain Clubs. Although they subsequently made a big profit at Blues it is my opinion that Gold&Sullivan’s main motivation in buying Blues was for respectability. Due to the way that they had made their money they were “looked down on” which resulted in Sullivan being barred from The Royal Box at Ascot/Epsom despite owning one of the largest “stables” in the Country. As owners of The Blues doors were opened to them which had previously been shut.
I don’t know but Man City haven’t done too bad have they?
They have done VERY well… buying their success. I would still question their owner’s motives though. Is it a family toy, like that of the owner of Chelsea? Money cannot be the motive in these cases. Whatever….in truth I wouldn’t mind some of their success at Blues!!
its very difficult to get carried away with this latest news. In my opinion E&Y are there for the good of BCFC in that they are looking to secure a deal to sell our club. If that has to be more long winded than we’d hoped for then so be it! “I personally want to see a deal done but it needs to be a deal that is ultimately sound” ! KRO!
I was under the impression that E&Y have been installed for the good of BIHL and BCFC is only an assett and will be dealt with as they deem to be in the best interst of BIHL, these guys are ‘accountants’ and have no compassion. Kro
Until the first signing is made I’m going to optimistic that next season is going to be a genuine attempt for promotion with us getting 75-80 points. Whether that’s enough depends on the other teams.
Gary has too much class to sign a player and then go to another club
Still very concerned that we know nothing about Trillion Trophy Asia and they appear to be hiding behind being registered in a tax haven, surely if they were reputable there would be information about them somewhere on the web?
Something else puzzling me is the fact we have been informed that we have £9 mill in the bank but we need investment of £800 thou and Stans as collateral to get the backing of our banks, ‘Our Banks’ not the bank of BIhl in HK? Feels like we are still being milked!
I wish Richard Branson was a blues fan.
Kro
Ok, not feeling so nervous about it after reading the annoncement properly,
‘The Receivers intend to enter into an exclusivity agreement with the Potential Offeror, a third party which is independent of and not connected with the Company and the connected person(s) of the Company’
Would still like to be a little better informed by EY, they might be in control but it’s our club. Kro