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Relisting Rules and the Sale of Birmingham City
The speculation over the sale of Birmingham City was stepped up a notch on Friday with the news in the Birmingham Mail that Sammy Yu was heading a Chinese consortium interested in buying the club. The report goes on to say that the deal is a long way off as financial checks have to be made before any bid is made.
There has been quite a lot of confusion over what needs to be done now before a sale of the club can be completed. One thing I’ve heard a few times is people mentioning that the shares in BIH need to be re-listed prior to the sale. I think part of the confusion comes from quotes like this one from Peter Pannu, made to bcfc.com after the BIH AGM:
“I’m glad that the past outstanding accounts have been passed through. This is a milestone and a pre-condition if we were to sell the football club, if appropriate. It is also a step towards the resumption of the trading of BIHL’s stocks on the Hong Kong Stock Exchange which had been suspended for sometime.
Now, to be absolutely fair to Mr Pannu I think people may have added two and two together there to make four and a half and assumed that this means that the relisting of the shares is needed prior to the sale of the club. I don’t believe Mr Pannu meant that at all; I think that although it is one paragraph there are two separate statements – ie that the accounts being released is a pre-condition if the club was to be sold and also that they’re a pre-condition to the shares being relisted – ie the two are not inter-related.
As there has been some debate with regards to this, I contacted the Hong Kong Stock Exchange for the definitive answer.
Whilst the Hong Kong Stock Exchange (HKEx) doesn’t comment on individual cases, they were happy to discuss a hypothetical scenario similar to the one Birmingham International Holdings are in. A spokesman from HKEx told me that in that sort of scenario, a “very substantial disposal (VSD)” is possible provided certain conditions are met.
Some of this I have covered before – Chapter 14 covers purchases and disposals and as I stated back in February, the release of the accounts and an EGM are required prior to a sale.
The spokesman also said that special attention would have to be paid to rule 13.24 which states that:
An issuer shall carry out, directly or indirectly, a sufficient level of operations or have tangible assets of sufficient value and/or intangible assets for which a sufficient potential value can be demonstrated to the Exchange to warrant the continued listing of the issuer’s securities.
What this means is that in the hypothetical situation of a sale, HKEx would want a company to show that they will continue operating as a business and not just a cash-rich shell after the sale of the subsidiary. Put into to context with BIH’s situation, it would mean that HKEx would need assurances that BIH has business other than BCFC (which makes up 95%+ of its turnover) to allow the sale to go through.
The spokesman also told me that it was a matter of policy that HKEx does not approve listing of new shares during suspensions.
In short, this should be good news as it means that one obstacle that people thought might be in the way of a sale isn’t. With all the accounts issued and up to date, BIH would only need to hold an EGM to gain the required shareholder approval and to demonstrate that there would be a business after the sale.
The chief obstacle that remains however is the price of the club; for all the talk of investment and takeovers there appears to have been nothing at all even hinting that there has been anything close to agreement on a sale price. My hope is that if there are people out there interested in the club, that they can come to a compromise with Mr Pannu quickly that sees all parties happy.
44 Responses to “Relisting Rules and the Sale of Birmingham City”
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Al — you say that “HKEx would need assurances that BIH has business other than BCFC (which makes up 95%+ of its turnover) to allow the sale to go through”. This, in your view, is “good news” because BIH “would only need to hold an EGM to gain the required shareholder approval and to demonstrate that there would be a business after the sale.”
But why is it good news? After all, BIHL hasn’t get anything in its business locker other than BCFC. Isn’t that the whole worry?
DoctorD – without wanting to be pedantic, there is a small fraction of BIH which isn’t BCFC – it might be 95%+ BCFC but that means it’s up to 5% not BCFC.
I suspect that BIH will have to show that that business will increase with the sale of BCFC
Do you have any idea Dan what the remaining 5% consists of?.
some sort of investment portfolio
Investment portfolio — yeah right.
Dan if the shares were put on the open market, would that not make it easier for a hostile takeover? and therefore easier / cheaper to buy Bihl and therefore the club.
It would… but I don’t believe people want to buy BIH, they just want the club
DaddyBlue,
That’s how i see it too and that is why i believe the BIHL board are dragging their feet over getting BIHL back onto the share trading floor.
They know they would have little power to stop someone slowly buying up the shares.
Trouble is, is there anyone out there that interested in Blues to spend months or maybe even a year or two buying up enough shares to mount an hostile takeover?
I just feel they will not sell the club till the parachute payments finish unless someone deluded comes along and pays £30 million for something worth at best £15 million.
Who would be mug enough to do that?
It was intimated that once the accounts for BIHL were signed off at the AGM, then shares would start trading, but about a month on it hasn’t happened.
Any news on this happening Almajir?
Intimated by whom?
I can’t see the shares being relisted for some time… the accounts were only one of the four issues flagged up by the stock exchange and there is a much bigger one that they have to deal with – ie Carson.
Paldini offer was raised to 30 million and was not sorted. But from what I have heard Mr Paldini still has has plans and not given up. He has said for few years now that blues could be great with the right owners and that the club has so much protential with a very good support and fan base that deserves more than they have recieved. People forget Paldini has lived in brum since he moved from italy in
1960’s he knows football. He couldnt do any worse than what yeung has done to blues. At moment fans would welcome the kumar brothers back. They were dark days but look brighter than these days.
I’m sure Mr Paladini hasn’t given up. It’s not his money though…
Whilst it is good to know that the pathway to a potencial sale is clearing,?.
I cannot see anyone beating their way to our door yet, !!, As your reply earlier, Aliamajir;, said, Carson Yuengs trial will i beleive hold things up until we all know the end-result, ?.
a change from this article colintattum Akwasi Asante signs new one-year contract (plus year’s option) at Birmingham City
This signing says one thing to me: That Lee Clark sees him as a regular in the squad this season. Otherwise, he would have been let go like Jervis was. It will be good to see the lad get some game time.
Thanks Tracey;, Let us hope that he comes good, both, for him and us, !!.
Good stuff Tracy, thanks for the update.
I think Asante has been unlucky in the past with injuries and I think he needs to prove himself this season…..something which the club and LC seem prepared to do.
To be honest if we can make Novak and Asante our forward line of preference (with Reece Hales getting a look in too) and use King/Zigic sparingly but effectively then I think we will phase them out over the 2013/14 season. Looking at this I reckon we will still need one more Forward to bolster us (unless we don’t get shot of Lovenkrands).
KRO
Great news Trace, cheers
KRO
………i thought that the courts would allow the sale of the club as long as the proceeds were withheld by the courts so that owings could be taken out when the case ends ,if carson does owe money….if this is right then b.i.h.are not going to want the 5% of b.i.h.that is not b.c.going under because we at b.c. are keeping the 5% afloat….which means that bih aint gonna sell till carsons case is done ,….the buyers aint gonna buy until the share prices are on the up because of carsons high price…but when carsons case is over ,if he is found guilty the F.A will not let him run the club so it could be October …….
Is it not beneficial for Pannu to maintain his position at BCFC, with the obscene salary and additions, and therefore not attempt to sell the club. For him it must be better to carry on trousering the cash, even though to keep the club going, it means we can’t afford to buy anyone and that good players will be sold. From his point of view, selling the club is like killing the goose that lays the golden eggs, and so looking for a buyer can’t be high up on his “must do” list. I suppose he must be looking for a platinum handshake.
most of us would have been upset if the firesale went ahead…. but we only loss butland…..
to be honest no lost to the players shown the door…………more hungry players who are looking to advance their careers in a blue shirt… our own young players chomping at the bits to play in their beloved colours happy days mate……….when we start gets results especially at home pp will be last thing on fans minds………………
got some more news for you guys probly just rumors though
Tracy – you need a forum for that…
Birmingham, Blackburn, Wigan and Ipswich are reportedly interested in Kilgallon, with the latter rumoured to have begun talks with the former Leeds man. here you are some people wont be to happy
Cheers for the heads up Trace
I think Kilgallon would want too much in wages for us to be in the races and he is 29. With that in mind I’d take a punt on either Ryan Cresswell 25 (Southend) or Harry Maguire 20 (Sheffield United). Both impressed me last year. Out the two we’d probably have more chance of Cresswell but either of the two would do me.
He’s a free transfer, so we are in with a shout, but if Blackburn are keen then I cant see anyone else signing him as no one can match their spending power.
What would we do without you Dan,great work again!KRO
please clark making blues defense his next agenda………one signed three to go hopefully they join Asante………….
mark, I would think (hope) that Lee Clark has a comprehensive list of players to replace any that don’t join/don’t re-sign. He did it with Neil Eardley within a few days of the Caddis deal going tits up.
totally agree – alway excited that he appears to find the next best thing staight out the blue staffsblue……. me personally defense is the most important thing…..whether davis stays or goes … to build a solid foundation for next season we need to concede half the amount we conceded last season. Hughton obviously did with money, credit must be given to clark if can get one or two decent centre halfs……and gel them quicky.
No way a consortium out of china or hong kong will want anything to do with blues the way things are with BIH. U would need extensive knowledge and experience of the way things work in china and there business ways to even contemplate a takeover.
If carson goes down who takes control of the sale? The authorities in asia or a third party company?
Been done before here
Whilst not wishing C,Y. to hell, !!. It would be so nice to escape the webb that has been entangling us.
and maybe into another lol
these names appear to be pucked out the air with no substance…….here few more names kil yan kee, noo kem , chu tem, wi kan win you got to smile :-0
to strengthen their squard for next season woverhampton wanderers announce the signing of the following players from china…… Wee Min Li Gwon, Wun Won Wuns, Win Won Soon, Doh No Wen……
Dan, what do you make of AR’s point that there is no incentive for PP to sell the club? It is a golden goose for him after all.
I’m choosing not to comment at this time
Dan – I do understand you declining to answer that question, may i put another one to you.. in your honest opinion do believe pp is worth his salt to bcfc, and his wages he is receiving are justified.
No.
Dan in your opinion has this Sammy Yu got what it takes, and the financial back up to take complete control……or is he just another lame duck…………….my further question have you research this fellow…
No comment and no comment
sorry Dan – if questions are like stepping on egg shells please accept my sincere apology, I am just inquisitive blue fan……… is giving your own opinion a sore subject……or are these questions leaving you open legally.
No comment.No comment -probably answers Mark question.
SAMMY YU is a prize tosser of the highest Order.
Met him in Hong Kong on Blues last pre-season tour.
Gave me his business card which I still have…said contact me if you need any help in BEJING or SHENYANG.
I took him up on his promise by e-mailing him several times but no reponse from him.
Met up with him after the game at the BIRDS NEST together with NICOLA ZIGIC on the pitch.
Told him he never replied and he said he hadn’t got time for casual fans and he was too busy.
What a tosser he is…interested only in himself.