BSH: Careful Wording

Both Birmingham City and Hong Kong parent company Birmingham Sports Holdings released statements on Wednesday confirming the end to negotiations with Maxco Capital Ltd. Both of the statements made took a somewhat “bitter ex” theme, with the wording suggesting it was incumbent owners who terminated talks rather than Maxco.

Hong Kong

I was quite surprised to see both statements, as I thought both the club and BSH would keep their powder dry as they have done in the past with reference to the Maxco attempted takeover.

Indeed, I’d planned to spend some time on Wednesday evening writing about the forum held with John Eustace, Craig Gardner, and the coaching staff at the Mackadown Sports and Social Club on Tuesday evening. Unfortunately, once again off the field shenanigans are forefront in our minds rather than the great work being done on the pitch.

There had been a point made at the Mackadown forum that no questions on the takeover could or would be answered, and it was somewhat liberating to listen to Eustace and Gardner rhapsodising over the work put in by the players and how despite money being tight they were excited for what could be achieved.

However, with social media busy with discussions over some of the points raised by the statements and with the dark threat of protest skulking around in the background I thought the best thing I can do is to offer some thoughts to try to help people understand the situation better.

The BCFC Statement

For those who haven’t caught it yet, the full club statement can be viewed on the official club website.

It’s short, terse and carefully worded for both legal and what seems like narrative reasons.

The Club can confirm that the proposed deal for investment by MaxCo has come to an end following the Club’s owners’ exercise of their right to terminate the deal.

As I’ve alluded to before, the statement seemed reminiscent of a teenager break-up, ie you didn’t dump me, I dumped you first.

Like teenager relationship break-ups, the truth is probably somewhere in the middle.

Without knowing all the details, I think it still seems obvious that there was a distance between the two parties when the deadline of November 30 elapsed, and it seems logical that with negotiations deadlocked one or both parties would walk away.

The reason for this in Maxco’s case is obvious; at £1.5m a month to fund the club there was always going to be a point where it was getting too expensive to fund the club without any obvious sign of a deal being done.

It’s a bit less obvious from the owner’s side of things because we don’t know what they are thinking.

There was a rumour from the Far East that they wanted the deal done by Christmas, and I think with no sign of negotiations completing that was never going to be met.

Since media reports on Friday 2 December, the Club have been approached by other interested parties.

That deadline makes the confirmation that the club have been approached by other parties all the more intriguing; after all, if someone could resurrect the deal there has to be thought that someone could push it through quickly if they had the funds and the intent.

My fear is that the approaches received by the club have come from some of the tyre kickers we have seen circling in the past.

As funny as it might be to some, I don’t believe anyone needs another ten-minute rant from Laurence Bassini on TalkSPORT and I think his chances of buying the club rank with my chances of winning the lottery; non-existent as I don’t buy lottery tickets.

I honestly think anyone serious about buying the club would be best keeping a watching brief for a short while at least, if only to see how the dust settles.

There are financial entanglements to be unravelled as a result of Maxco stepping away and if I was an investor I’d want to see how quickly they’re settled before making a move.

The HKSE Announcement

I was incredibly surprised to see an announcement from BSH to the Hong Kong Stock Exchange on Wednesday afternoon. We know from past experience that BSH have stayed well away from talking publicly about anything regarding Maxco and I figured they’d probably maintain that distance.

The fact BSH have made an announcement has made me curious if someone has employed my standard tactic of complaining to the HKSE about a lack of announcement from BSH and actually got some success from it.

If that is indeed the case, then I want to congratulate them for succeeding where I have often failed.

At first glance, there didn’t seem to be anything new in the announcement made by BSH. The announcement made it appear that BSH had denied any involvement in the proposed deal at all, presenting the narrative that Maxco were only investing in the club.

It certainly caught me out when I read it the first time.

However, the announcement showed how sneaky BSH can be with legal terms. Back in June, BSH made an announcement clarifying media reports, stating that:

As at the date of this announcement, the Company has not entered into nor exchanged any agreement to dispose of its approximately 75% interest in BCP, and BCP and the Club remain subsidiaries of the Company.

The announcement made yesterday says:

Further to, and since the date of, the Announcement, the Company has not entered into any agreement in relation to the disposal of its approximately 75% interest in BCP, and BCP and the Club remain subsidiaries of the Company

While these sentences appear identical, they’re not. There is a word omitted from the second sentence which makes all the difference.

In June, BSH confirmed that they’re not entered into nor exchanged any agreement re the 75% that the holding company owes of the club.

Yesterday, BSH confirmed only that they’d not entered into any agreement.

The implication here is clear; that between June and yesterday, BSH had exchanged agreements for the 75% of the club with Maxco, backing up Paul Richardson’s continued proclamations that Maxco had a deal for the remainder of the club.

Of course, with negotiations failing both parts of the deal have fallen flat, making it all moot and allowing BSH to give the impression that they ain’t selling.

Whether they are or not remains to be seen – not to mention if BSH is only considering a staged deal.

As we all know, the thing holding back any deal for the whole club in one go is the stock exchange listing.

It’s my belief that the key to that now is Paul Suen Cho Hung, owner of Trillion Trophy Asia and largest shareholder in BSH.

The problem is that Suen doesn’t have just financial reasons for holding onto the listing. When he bought BSH way way back in 2016, Suen made an agreement to comply with various demands from the HKSE before selling it on, due to the state BSH were in back then.

I don’t know exactly what those restrictions were and how they would be affected if the company was delisted from the stock exchange, but my fear is that there would be implications for Suen which would affect his other dealings on the HKSE.

As I’ve always said during this whole takeover palaver, it’s important for us as fans to remain circumspect.

We’ve seen how people have ended up with egg on their face after declaring a deal has been done; we’ve seen how “two to three weeks” can turn into five months and failure.

The only way I think it’s possible for anyone to get any idea of what the BSH board are thinking is to be at the AGM in Hong Kong at the end of this month. Sadly, with zoom not an option it won’t be me asking those questions as the cost to travel is prohibitive; hopefully someone else can attend and ask some pertinent questions.

For the rest of us, I think the only thing we can do is be patient, and to enjoy the football on the pitch.

Saturday promises to be a big day for Blues fans with a huge following going up to Bloomfield Road; let’s hope Eustace and the team can continue to give us reasons to forget about takeover worries for a while.