The “first step” in the takeover of Birmingham City by Carson Yeung was taken on Thursday, when the Hong Kong-based businessman’s investment company, Grandtop International Holdings, paid a deposit of £3 million to the club as a token of their intent to go through with their planned takeover.
A full takeover bid is now required by the end of September.
The deposit, which is non-refundable, was described by industry insiders as a reassuring move, considering Grandtop's ability to make a concrete offer has been treated with some scepticism since Yeung returned to the negotiating table. If an offer is agreed the deposit will be transferred to a receiving agent to be used as part of the payment to accepting shareholders.
Grandtop remain guarded, however, describing the move as "the first step towards a potential offer", but cautioning that "there can be no guarantee that an offer will be announced by Grandtop or that an offer, if made, would be successful".
Earlier this month Birmingham City said the issue of funding would be a major factor in determining how the company responds to the move after a previous approach by Yeung fell through in 2007. Yeung, who has a 29.9 per cent stake, intends to take over a further 40 per cent priced at £1 per share. He has until Oct 1 to put up the rest of the money.
"Grandtop, the holder of an existing 29.9 percent interest in the issued share capital of Birmingham, has put down a deposit of £3 million with a view to making an offer for the entire issued share capital of the company other than the shares in Birmingham already held by Grandtop," Birmingham said in a statement to the Stock Exchange.
Shares in Birmingham were trading at 71p, up 46.4 per cent, at lunchtime on Thursday, valuing the business at just under £58 million. However, Yeung’s prospective bid values the club at £81.5 million.
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