Yeung moves towards Birmingham bid

Pa
Thursday 20 August 2009 10:52 EDT
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Birmingham today revealed Carson Yeung's investment company has paid a £3m deposit with a view to making an offer for the Premier League club.

Yeung's Grandtop International Holdings, which currently holds a 29.9% stake in the St Andrews club, has entered into an escrow agreement with City.

He had looked set to bid for the club two years ago but an offer failed to materialise, prompting the current owners to challenge him to prove he had the financial muscle to make a firm approach.

Grandtop have done that today by placing a substantial deposit which could lead to a takeover worth around £81.5million.

A statement to the Stock Exchange said: "The board of Birmingham announces that on 20 August 2009 it entered into an escrow agreement with Grandtop International Holdings Limited, the holder of an existing 29.9% interest in the issued share capital of Birmingham.

"Under this agreement, Grandtop has put down a deposit of £3million with a view to making an offer for the entire issued share capital of the company.

"The £3million deposit is a surety for Grandtop's ability and intention to make an offer, without which the company was unable to commit resources to considering an offer."

Majority shareholders David Sullivan and David and Ralph Gold have always maintained they would not sell the club unless they were confident it was going into safe hands.

The statement added: "The irrevocables (a signed agreement for the sale of shares), if signed, will be in respect of 40,757,026 ordinary shares of 10p each in the share capital of Birmingham, representing approximately 50.0% of the existing issued share capital.

"The offer, if made, would value the entire issued share capital of Birmingham at approximately £81.5 million. It is expected that the irrevocables will be signed as soon as Grandtop indicates that it is in a position to announce a firm intention to make an Offer on the Agreed Basis."

Birmingham's statement confirmed Grandtop must either announce a firm intention to make an offer by October 1 or declare unconditional interest by October 30 or risk losing the deposit.

The Birmingham City plc statement concluded: "The signing of the escrow agreement is the first step towards a potential offer by Grandtop and there can be no guarantee that an offer will be announced by Grandtop or that an offer, if made, would be successful.

"Grandtop confirms that any offer for Birmingham would be made only in cash. This announcement has been made with the consent of Grandtop.

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