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A Tentative Approach
Birmingham International Holdings yesterday made an announcement to the Hong Kong Stock Exchange to confirm that it had received an approach from a sports management company with respect to Birmingham City.
Naturally, as any news over a potential takeover does, this announcement spawned reams of comment from Blues fans about who it could potentially be, if the timing was coincidental to the transfer window, etc. With this is mind I have taken some time to speak to people and to digest the information fully to try to analyse what this means for BCFC.
Not a bid
I think the first thing that needs to be clarified is that this isn’t a bid for the club – it’s an approach where a party has told BIH officially that they may be interested in purchasing the club. Essentially, this could be as little as a solicitor’s letter to Peter Pannu stating that there may be interest and to set up the meetings necessary to see if it will go further – an analogy would be going up to a shop assistant in Currys saying “I like that TV, could you tell me more about it?” It doesn’t mean that this company will buy the club – it doesn’t even mean that they will definitely make an offer. All it means is that they might.
Who are they?
Good question. As of the moment, we have no idea. Again, it’s important to read the statement properly – it states that a Sports Management Company have been in contact who have indicated that it could lead a consortium to buy the club. My opinion on this is that it sounds like a fixer or agent type has been in touch saying that they know someone who might want it and want to set up a deal. This is analogous to Paladini; Paladini was never anything more than an agent fronting a consortium’s bid that would get a job out of it if the deal was concluded. It’s entirely possible that this could refer to Paladini but I think there it is implied that it’s a new bid from a fresh source and thus I’d be willing to discount it being the Solihull-based Italian.
I’ve seen mention online (particularly from James Nursey on twitter) that it’s a HK/Chinese based consortium and that it’s further ahead than stated. I’m not sure if he’s been fed information from Peter Pannu or if he is making guesses based on previously known information so I’m not going to discount what he is saying out of hand – however I don’t personally believe that anyone bar the bidders and Mr Pannu/BIH know for sure who these people are and thus I believe that it’s only speculation until it becomes public knowledge and should be treated as such.
Is there anything in the timing of this announcement?
I’ve seen quite a few people pick up on the second affirmed date of contact between this party and BIH being the 31st of January and speculating if this is what stopped sales of players on the transfer window deadline day. I don’t think this is the case and that the timing is purely coincidental – I can’t believe Peter Pannu would risk administration (and probable redundancy) on the possibility of a deal being done – and as discussed before this is nothing more than a possibility. From the information I have gleaned there were no further sales after Jack Butland as no further money was required to keep the club afloat and valuations weren’t met; it’s as simple as that.
Why say anything if it’s only a tentative approach?
I’ve looked into why this announcement was made – reference is made within the statement to Part XIVA of the Securities and Future Ordinance – as I thought this might give some indication as to what is happening. The specifics of the SFO it refers to discusses inside information and puts the onus on companies to make the public aware of this information as soon as practicable. However what makes it interesting is under the rules it’s illegal to put out information that is “false or misleading to material fact” – eg a statement that isn’t true in order to smoke out real bidders. It’s also interesting that information doesn’t have to be made public if it involves “an incomplete proposal or negotiation”. As it’s known that BIH are working under the direction of a compliance advisor and as such are being very very careful to follow rules to the letter it thus makes sense to take this statement at face value and not look for underhand reasons for its publication.
So what now?
Realistically, the announcement doesn’t change anything. We already knew that the club was for sale and that Mr Pannu is in Hong Kong looking for buyers/investors. It confirms that there are potential bidders out there but it doesn’t mean anything is going to happen any time soon; indeed, as discussed last week, the sale of the club cannot be conducted without the BIH accounts anyway so it’s not going to happen any time soon. As more information comes out we will have more of an understanding but as of yet there is nothing in the press in HK or China that I can find that gives a hint as to who the interested party could be.