Blues’ owners warn off potential bidders as share price fluctuates
THE owner of Birmingham City FC has warned off potential bidders for the football club that it is not interested in a takeover.
Birmingham International Holdings, which owns a 96.64% interest in the St Andrews club, made the announcement after fluctuations in its share price on the Hong Kong Stock Exchange.
BIH said in a statement to the exchange and to its shareholders that following inquiries it was not aware of any reason why the share price should have said have increased although there is speculation that a fresh bid for the control of the Championship club could be about to be tabled.
However, the BIH board used the statement to clarify its position regarding unwanted approaches from potential investors.
It said: “The board wishes to inform the shareholders of the company and potential investors that from time to time, the company has received indicative, non-binding offers from various third parties in relation to a possible acquisition of a controlling interest in Birmingham City Plc, a 96.64% owned subsidiary of the company and which owns the entire issued share capital of Birmingham City Football Club Plc.
“Given the company’s intention to continue to operate as a listed company, and accordingly to fulfil all relevant sufficiency of operations requirements under the listing rules, it is the board’s view that such informal non-binding offers will not be entertained.”
It is an odd statement for the board to make at a time when the club is up for sale and known to be struggling for finance. However, the board is known to want to capitalise on its original investment of £80m, made in 2009 when the club was still in the Premier League.
However, its worth has plummeted since relegation and the imprisonment of former chairman Carson Yeung earlier this year on money laundering charges has made the BIH position vulnerable.
Nevertheless, bids which in the board’s opinion undervalue the business will not be considered.
Latest efforts by the owners to attract investment suffered a further setback last month following the collapse of a bond issue.
The BIH board had launched the bond issue in July with the intention of raising around £9.6m (HK$ 120,000,000). The money would have been used to provide working capital for the club.
In August, BIH was forced to issue a profit warning after announcing losses in excess of £12m. The holding company said the losses were attributable to a decrease in revenue from the Championship club and a reduction in transfer fees.
