Often Partisan

Prolonging the Agony

The takeover rumour mill has gone back into overdrive with Tom Ross confirming on his radio show on Friday that Peter Pannu is to return to the UK on Monday – ostensibly to sort out the sale of the club.

I’ve been thinking about this a lot since I wrote the piece last week about a potential purchase of Carson’s shares. The idea of someone buying Carson’s stake in BIH didn’t make sense to me but it seems evident something is afoot – and in this case I’m a believer that there is no smoke without fire. With this in mind I wanted to advance some thoughts of my own – and I will stress that they are nothing more than thoughts of my own – just to give my take on the situation. I encourage you to treat it with the same scepticism that any speculation deserves.

I think the first thing to remember is that there are three entities involved here. They consist of the football club (BCFC), the UK holding company (Birmingham City plc or BCPLC) which was the company that was floated on the Alternate Investment Market (AIM) here in the UK and then the Hong Kong company Birmingham International Holdings (BIH) which Carson used to buy the UK holding company that owns the football club. In my mind it would make most sense for any purchaser to buy BCFC or BCPLC rather than the entirety of or a stake in BIH; buying the subsidiaries would ensure that the business stayed in private hands and would in essence bring the club home from the far east.

Thus I think it would make more sense if someone was going to buy a stake rather than complete a full takeover straight off then they would take one in the club and not in the holding company as the rumour went. There is precedent for this – Carson bought a 29.9% stake in BCPLC in 2007 with the idea of completing the deal in three months. As we all know that deal eventually took two years but I do think a repeat is possible.

If someone bought a stake in BCFC/BCPLC, then BIH would receive an immediate infusion of cash which would keep them (and ostensibly the club going). However, what it would also do is allow the chance for Carson to “back out” of the deal in the scenario he beats the criminal charges he is being tried on in Hong Kong. A purchaser would have chance to get into the club, help with the running of it and ensure that the club was in the right place going forwards for when the takeover was completed.

It’s not hard to see the potential problems with such a scenario. Firstly, I think most people would prefer a takeover that was a clean break – a complete clean sweep as it were. If this sort of prolonged takeover took place you’d have to expect some sort of split control of the board whilst it was ongoing – and I’m sure that wouldn’t be popular. Secondly, we saw what happened when Carson tried to do this – he couldn’t come up with the readies to complete the deal down the pike. I’d be concerned that anyone who was willing to enter into a deal like this had the money to complete it also until they did complete it; once bitten, twice shy if you like.

The thing to remember in all this is that any sort of negotiations take time and that there are no guarantees that they will be successful. If Pannu is indeed back to negotiate the sale of the club tomorrow I wouldn’t necessarily expect an immediate announcement and I wouldn’t believe that a takeover was happening until there was an announcement made to the stock exchange.

We’ve waited a long time for news about a takeover and it could just be that news is imminent. However, it’s my personal hope that when the news does break it will see a complete change at the top because any sort of staggered deal will only prolong the agony.

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94 Responses to “Prolonging the Agony”

  • Bluehobba says:

    As the team is playing pretty well at the moment, it would give everyone a lift if there was a positive announcement regarding the sale of the club, kro

  • DoctorD says:

    Great blog. What’s more important to me than how the sale (if any) takes place is WHO is involved any partial or full take-over.

    Please let it be someone who is sincere and in this for the right reasons. I think the fact that we are not doing so well on the pitch can only be good news — we’re unlikely to attract total charlatans who see a quick buck because, to be honest, no-one’s going to get rich quick from Blues right now.

  • Tony says:

    Fingers crossed maybe this time something will happen. The fact that negotiations are to take place in this country surely means its Paladini or the carrot consortium.

  • alexjhurley says:

    Everything crossed paladini’s not to the interested party. “Frying pan” & “fire”.

  • Shane says:

    I still don’t believe the club will be sold certainly not to buyers outside of China it’s not in Pannu’s interest the guy is going to sell him self out of a very well paid job hence why I believe he is only interested in Chinese buyers to negotiate himself staying on

    comment edited

  • DoctorD says:

    I still come back to the question: why would anyone want to buy Blues?

    There is a distant prospect of the club reaching the Premier League with all its riches, but it not that likely at the moment as far as I can see.

    There is the “status” of owning a football team for sure, but has Blues ever really been that sexy?

    I can only hope any potential suitors see themselves in the true and proper role of owners — as custodians of the club.

    • Wearynose says:

      Premier League? There is still a greater chance of us reaching Division 1 than leaving the Championship via the conning tower. Relegation would probably concentrate BIHL’s mind on a sale sooner rather than later. Any good performance on the pitch is a bonus for the diehards who attend. Relegation could bring the bigger bonus of our release from BIHL. In all probability, a quick purchase is not likely to be the preference of any prospective purchaser when the greater odds for a lower acquisition price still rest with a more likely finish in the lower reaches of the Division, toying with the trap door, than they do with a top half finish.

      Lee Clark, though not carrying my own conviction as to his ability, is doing a little better than could have been reasonably expected given the dire market position in which he has been asked to deal. If he is still here when the club is eventually taken over, I hope that he is given the chance to manage under better circumstances for a season or so as a reward for his struggle with the current position. If he shows that he can produce footballing teams then the benefit of continuity would have be served. If he doesn’t. then a least the club would have demonstrated that it is a worthwhile employer.

  • TonyE says:

    Could it be that it’s easier to buy a share of BCPLC than BIH because of all the small shareholders not wishing to relinquish their holding, even though it’s a failing company. Then by having a stake in BCPLC would it then make it easier to complete a buy out for complete control of BCFC? Probably rubbish, just a thought.

  • AR says:

    I don’t understand what “it would allow the chance for Carson to back out of the deal in the scenario he beats the criminal charges in HK”. Please explain to an old man.

    • almajir says:

      If he only sells a piece now, and doesn’t sell the rest until he knows what’s happening in court, he maintains control and can buy the piece back if he’s found innocent.

      • Monty says:

        I can’t see how anyone would want to put money into a failing club to turn it round only for carson yeung to snatch it back later it doesn’t make sense?

      • Wearynose says:

        Surely he could only buy back what he might have sold if the purchaser, and new shareholder, wanted to sell; unless of course, Yeung was to buy other shares to take his holding above the 29 point something % which is required, in the UK anyway, for a shareholder to make an offer for all the other shares. As others imply, that line of reasoning seemed to me to be stillborn.

  • Oldbluenose says:

    O,M,G. Here we go again, As with Dr,D’s 1st posting, I sincerely hope it is a British interest, [ if there is indeed any interest at all ],
    I confess to still being confused concerning the fact it is a 3, stage ownership, If we are sold as B,C,F,C. + B,C,P,L,C. Does that mean full indepenence from B,I,H. ????.

  • bcfcjv says:

    what about if Pannu is the one interested in shares. Sounds like a far fetched idea but I wouldn’t rule nothing out.

  • smudge says:

    I will be honest, I have reached the point where I will treat this as I treat player signings. When I see the pictures of them holding the scarf/shirt in the stand then I will believe it. We as fans have been fed rumour after rumour and while it is interesting to speculate on these rumours nothing has been confirmed. Like most I want an owner who has the best interest of the club and has the desire to responsibly build a successful and prosperous club. I really don’t mind if we stay a championship club for another few years as long as we are run properly. I do feel that there is more to played out in this sorry saga, lets hope I am wrong.

  • steve says:

    I hope Tom Ross is right.He’s took a lot of undeserved abuse lately. All he is guilty of is telling us what he believes to be happening.

    • almajir says:

      Tom made the mistake of saying a deal was agreed and an announcement was imminent three months ago – he should never have said that. If he had said that there had been progress and he was hopeful something could be done… well, he’d have been cut some slack.

      • BigmanSteve0 says:

        I’d rather we stay as we are unless a real decent guy buys us with a few quid to spend or the agony will be on going….kro

    • Stephen Wood says:

      Hi Steve, It seams that this has drawn a big interest, We all love the the club & want security & a secure base to work from! Are we all clutching at Straws? I do hope Tom Ross is not trying to fuel
      the feelings of us faithful , We all want to see the end of the Carson Reign. So i really want Ross to be right . I hope he is!

  • Berkshire Blue says:

    I remain very sceptical. Will be interesting to hear what Colin Tattum has to say – he seems more more balanced on this subject than Tom Ross.

  • steve says:

    Dan,what’s making you think something could be happening ?

  • gerald squires says:

    So how would dear but sweet old tom know of peters arrival? Unless of course he was tipped off by the alleged italian purchaser?

  • gastank says:

    Almajir, the shares that I bought when Mr Sullivan was here, which I still hold, are they shares of BCFC or BCPLC? And what is the difference between BCFC and BCPLC?

    • almajir says:

      The answer to your question is that they are shares in Birmingham City PLC, which was listed publicly on the Alternate Investment Market (as mentioned in the article)
      The difference is one is the club and one is the holding company that owns the club (again, as mentioned in the article).

  • John says:

    Blues are being taken over next week, headed by Ron Atkinson.

  • Tim faraday says:

    Don’t you mean Rowan Atkinson!!

  • Tony says:

    Dan why was my post deleted iiit was not controversial?

  • ESONEULB says:

    I for one will not support Carson Yueng period with anything to do with BLUES. I have 100% done with him.. not because of what has happened or for what he does or does not stand for…. for me its the fact he has hidden away and not said a word to the people that matter.. that tells me we do not matter…. and unfortunately we do… without us know-one has a club .. KRO

    • Mickey07 says:

      Yes mate totally agree,there is absolutly no reason at all why he shouldn’t have spoke to us fans….all very convenient to hide behind a court case and say nothing,as this money laundering he’s up for has nothing to do with bcfc and us fans….my feelings only can’t wait to see the back of him and hopefully we will have our day soon in seeing him go to prison….

      • almajir says:

        as this money laundering he’s up for has nothing to do with bcfc

        Except it came out in the second day of the court case that money was used from the accounts in question to buy Blues. If you’re gonna rant, Mickey get your facts right kidda.

        • Mickey07 says:

          Ok mayor point taken but still no reason why he shouldn’t speak to his bread and butter over the last two years is there?the bloke has put us through the ringer we deserved at least something from him.

          • almajir says:

            Mickey – would you have even listened if he did? Or would you have insulted him in the same manner as you do already?

            We both know the answer to that question, and thus you can’t blame him for keeping schtum.

          • Mickey07 says:

            I’d respect him more if I’m honest and cut him a bit of slack…

            comment edited – you can’t call them that on this site mate. Libel laws and that

  • Billy Blews says:

    When Superboy was sacked he said “I will be back. you have not seen the last of me”
    Look out for a shining star above the Kop and await the return?

  • gerald squires says:

    Now why would someone at the club tell him?

  • Tony says:

    Maybe Tom has an insider working for him

  • Tony says:

    The Kitman is a good friend of Mr Ross

  • steve says:

    According to a reliable poster on freeforums the new owner will be at Tuesdays game.

  • Tony says:

    Dan is not his bright cheery self this evening, bit short tempered.

  • Enckelman says:

    I’m not getting my hopes up, journos and potential buyers talking of deals to be done soon hasn’t materialized. I’ll wait for the good old and reliable yellow breaking news banner on sky sports news for this one.

    • almajir says:

      the irony…

      • Enckelman says:

        really?

        amount of times ssn have claimed a deal has been/or close to completed? 0. They’ve got it right so far.

        This particular story means too much to the fans, Paladini and Tom Ross should not have said a deal had been agreed unless they were 100% sure the deal would go through.

  • eveshamblue says:

    If a consortium was serious about taking over we wouldnt have had this cloak and dagger crap. Pay the money and take over if serious? Asking price is 40M (probably alot less now as the club is depreciating and all the player assets have been sold off now). We have been up for sale for ages and no one apart from some Italian chancers have stepped forward so far.

    Cant but help think that CY is just buying time and employing delaying tactics. Just like his about turn on standing up in court business. If he gets off he will step back in.

  • gerald squires says:

    Its a set up blue

  • Chris W says:

    As you say it is your speculation, however, you have more insight than most supporters and spoke to more in the know people, therefore I always read these topics with more belief and trust than the Mail.
    It might make more business sense for someone to come into the club in a similar scenario as CY did and just buy the club off BIH.
    CY was hoping to have complete control in 3 months. What are the chances of someone buying BCFC or BCPLC with the same time scale but with the one thing CY didn’t have…. The ready cash to do so and, if I read correctly, would buy the club and bypass HKSE?
    Sounds good on paper but would it or could it work in reality.
    One other question you may have the answer too… If PP is to be in Britain tomorrow would he not be hear already or is he flying in on Monday for meetings later in the week?

  • Chris W says:

    Could PP even be part of the consortium interested in buying the club?

  • edd77 says:

    Ron Atkinson was at Wednesday’s game isn’t he pals with paladini

  • TonyE says:

    I suspect confidentiality agreements have more than a little to play in all the cloak and dagger stuff going on, hopefully PP is back in the UK tomorrow and the club sale will be concluded without further delay. Preferably to a UK based consortium who have sufficient funds to run the club as a going concern without selling all the best players (who are left).

  • chris says:

    It might be a part buy out as Dan says and i would suggest it may be because they want the £14 million debt repaid, but the new owners would probably not want or be able to pay all the debt up front, so it will be staged payments which once completed the remainder of club will be sold.

  • BhamCityJulian says:

    I confused now. To buy shares in BCFC plc you have to acquire then from BIH, not from CY. Would not someone wanting to be significant minority shareholder in BCFC plc not require the approval of the BIH shareholders?

  • John says:

    Like my earlier comment, it’s Ron Atkinson, Gary Newbond & an Italian. Genuine!

  • Frankie says:

    Yep, get it sold Pannu, then get on the Plane back to Hong Kong, never to return.

  • Blue Nose Gaz says:

    I have heard so many false rumours regarding the sale of the club I like most fans just want these current chancers out of the club.
    I hope one day we will find out why they bought us in the first place because they have done more harm than good since day one.

  • Steve Aerobic says:

    John, im sorry but how can anyone take your insider infornation about Ron Atkinson and Gary Newbon seriously if you cannot even get their names right!! God help us if those two are in charge!

  • dave mann says:

    gary newbon and ron atkinson, your having a girraffe aernt ya! they aint got the money and
    there vile, rather keep carson to be honest……..please no……and i mean …please no!!!!!!!!!! KRO.

  • sw16girl says:

    It seems inconceivable that anyone with any business sense would enter into the kind of arrangement suggested here or anywhere else. Far more likely is that PP is turning up to try and get some more money from somewhere. Any of the following is possible:-

    a. Securitizing further payments due to the club
    b. Selling any assets owned – training ground? actual ground? Coupled with that might be a leaseback agreement possibly at a highish rent in order to make the sale price higher. alternatively raising money by way of a legal charge over fixed assets
    c. Securitizing the further income from player sales down the line or the sums due in from the sales already made but which are payable by installments
    d Securitizing academy player assets
    e. entering into long term franchises for food outlets/club shop – money upfront in return for running the concessions for some years.
    f. Some very early launch of ST sales for next year – incredibly discounted tickets in return for money now .

    Or is could be some other money acquiring wheeze no one else has yet thought of.

    • Dan H says:

      a. We had a loan from Hong Kong only 2 months ago, most likely secured against the parachute payment installment – I doubt we’ve got anything left to secure against
      b. Training Ground is owned by Birmingham University, Ground is subject to a debenture from HSBC – no opportunities there
      c. Pannu wouldn’t need to be back in the Country to do this, Julia Shelton would most likely deal with this arrangement
      d. These would just be straight compensation hearings
      e. See item c above
      f. After the Rangers debacle I think every football club will steer clear of securing anything against pre-selling the season ticket assets.

      If Pannu’s back there must be a good reason – i.e the Loans have run out, the revenues have dried up, Carson is out of Money and they now have now choice but to sell and try to recover as much as possible of his loans to BCFC.

      We’ll be lucky if we have new owners by January but fingers crossed it happens sooner

      • SW16girl says:

        Thanks for the reply Dan. however
        a.noted
        b.training ground looks secure which is good news. The actual ground could easily be sold regardless of the debenture -the point with a debenture is that if you pay it off you can buy the asset. If the ground is worth more than the debenture the money will go to pay off that first and then the balance to CY/PP. I assume that is why the Trust are trying to get it registered as a community asset
        c.Noted but there could be reasons why he would want to deal with these direct depending on where the money is going to be paid.
        d.I was not clear on this – what has been offered to other clubs with successful academies is securitising the whole academy so on a sale of any player now in the academy a high percentage goes to the person who has supplied the money upfront now. sounds crazy but there is a scheme that does this (or has in the past)
        e. See reply to c above as well
        f.Again you do not quite understand – in this case he is not securitizing the assets with a third party but offering it to fans direct. Get next years ST at a 20% discount if you buy before Christmas, or a 2 year season ticket now for only £500 or a five year ticket for £1,000. The money is paid in and it goes out to CY/PP or is used just to keep the club afloat in the short term. It is unlikely many fans will take it up but there will always be some.

        Another thing that has been done is actually providing a floating charge over the players and their transfer fees.

        I am not saying any of the above will happen but some of them have all happened at other clubs in similar positions

    • chas says:

      swGirl, Blues don’t own the Training ground, it is on a 100 year lease(less now) from Birmingham University.

  • Tony Harper says:

    Gary Newbond a villa fan….and big ron so what on earth would they be interested in birmingham city?

  • dave mann says:

    exactly Tony thats why its a load of rubbish, newbon not newbond always loved vile
    when he worked at central, though he claimed he was a wolves fan and big ron
    managed them and always rubbished us so no way hozay do i want them pair any
    where near st. andrews end off!, ive got more chance of buying blues than them
    clowns.KRO.

  • Tonytiler says:

    Gary newborn is a Leicester supporter , He isn’t remotely intrested in our club , how do I know ? Because he told some blues fans after the Leicester game that it’s not true . The new owners are local and were present at our last game.

  • dave mann says:

    sorry Tony stand corrected on newbon but who are these locals? KRO.

  • DiscoPete says:

    Newbon was dragged through the coals for accusing Blues fans of causing a riot at a boxing match. Just because one of the crowd was wearing a Blues shirt. This was televised as Newbon was commentating on the match. I’m ashamed to say I can’t remember the boxers name but he is a died in the wool bluenose who carried the twin globe badge on his short in the ring. For years after that the song on the terraces was about Newbon’s personal skills at self gratification. Perhaps someone on this blog can remember if he apologised or not and the name of the boxer. Also Newbon played a charity game at Stans appearing in a Villa shirt for an “all stars” villa team. My personal dislike of the bloke shouldn’t mean he would do a bad job for Blues but he would be involved for the possibility of making a few quid rather than for the club as a fan.

  • bluenoserob says:

    Wasn’t it newborn that did his best to get Paul Tate banned for punching someone years ago,sorry my memory ain’t what it was lol.surely to god it can’t be big Ron and him

    • chas says:

      Rob, it was Newbon who got Noel Blake banned. We played Villa and McMahon was kicking everyone . They beat us and he went up to Blake and started mouthing off, so Blake nutted him. Nothing was said in the Argos , On Tv or in the Monday morning press about it , but on Central TV Newbon bought it up and showed the clip two or three times, saying that the FA should look into it. They did and Blake was banned, ever since then Newbon has been hated by older Blues Fans.
      Having him at Blues would be as bad as having John Bond as manager.

      • Marky mark says:

        Shouldn’t disrespect the dead, John Bond was a very good manager

        • chas says:

          He was crap for us, and should not have been given the job anyway, he did nothing but bad mouth Blues on TV a couple of times when they were struggling. He never seemed to have a go at any other team.

          • Frankie says:

            Short ‘memory’.
            John Bond wasn’t a total success at Blues but was responsible for just about the best performance I have ever seen from a Blues team.
            The day we beat the Vile 3-0 at Vile Park (could have been 7 or 8) was a tactical masterclass and I mourn for that alone.
            RIP Bondy !

  • bluenoserob says:

    If this really is the end of this horrible saga ,I would like to say thanks to Dan for all his work.for a long time Op was the only place I could find anything about what was going on with our club.also to the guys who have posted ,knowing that others are hurting too has been a big help.even if I don’t always agree……I salute you all ….kro

  • mark says:

    must be co-side with Carson taking the stand……..we always like surprises at the stans……………

  • steve says:

    According to the Sun this morning.We’ll be in administration in 6 weeks if we don’t get new owners.

  • mark says:

    lets hope the attendances improve for next two home game, and we see off stoke in cup lol should be a real money spinner…………….

  • mark says:

    i bet pp delighted we are still in the cup…………….

  • tony says:

    Can anyone confirm if Pannu actually arrived in the country?.

  • Richard Granfield says:

    On 9th September BIH Ltd issued a Profits Warning stating “Significant net loss for the year ending 30th June 2013, as reported by Dan earlier this month. It’s worth repeating that it’s “Primarily attributable to a decrease in profits from sales of players registrations”.
    Since then the accounts have been delayed a month.
    Some fans say that PP’s salary is too high, but many may not know that not only is PP the Managing Director of BIH, but also Chief Executive Officer AND Executive Director. Talk about a one man band!

  • Frankie says:

    No Richard, think what a lot of Blues fans are saying is that Pannu’s salary would be ‘too high’ if it was set at U.K minimum wage.
    Personally, for his efforts so far as ‘chairman’ of Birmingham City. I think a stale bun would suffice.
    BIHL is a joke ‘paper company’ anyway, just used as a conduit to receive money from BCFC and should not be confused with a real job.

  • […] whole club immediately; at least not before the holding company is relisted. This ties in with my thoughts from a couple of days ago where I opined that maybe Carson would look to sell a piece of the club […]


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