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Tom Wagner has moved a step closer to completing his Birmingham City takeover after the EFL approved the deal.
Wagner submitted a business plan to the EFL, including a budget that will see Blues stay within Financial Fair Play regulations, and the club received notification on Friday that it had been approved. A statement on Monday afternoon confirmed the news and current owners Birmingham Sports Holdings Ltd (BSHL) posted an update on the Hong Kong Stock Exchange (HKSE).
The next and final step is to receive approval from shareholders on the HKSE. The circular has been delayed and is now expected to be processed on or before June 30 for shareholders to cast their votes. Insiders do not expect any problems with Wagner’s proposed bid to purchase a 45.64 percent stake, which includes St Andrew’s. Here is everything we know so far…
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What Knighthead have said
Knighthead issued a brief statement to BirminghamLive after Monday’s announcement. It said: “Knighthead Capital Management is pleased to confirm that the English Football League has informed Birmingham City Football Club that it has no objection to the proposed acquisition of the Club by Shelby Companies Limited in accordance with, and as defined by, EFL regulations.
“Knighthead wishes to thank the EFL for its engagement and diligence throughout the process. Shelby will share more information about its long-term plans for Birmingham City FC once approvals are received from the Hong Kong Stock Exchange.”
Those plans are likely to expand on the open letter Wagner penned to supporters on the day his proposed takeover was announced. Wagner and his team will then set about actioning those plans once they are in position at St Andrew’s.
The Hong Kong Stock Exchange statement
A statement by current owners BSHL on the HKSE said: “The Board is pleased to announce that BCFC has received a letter dated 2 June 2023 from the EFL, whereby the EFL has confirmed its approval, subject to certain conditions including BCFC operating within a budget submitted to the EFL, of the acquisition of control (as defined in the EFL Regulations) of BCFC by the Buyer.”
Wagner’s approach to business
The American financier gave a fascinating insight into his investment strategy during a Bloomberg business masterclass recently. Wagner explained why Knighthead often bet on companies that need to be turned around.
He said: “We look at a business that might be a carcass and say, ‘Can we revive that thing?’ Because if you can, the pie that you’re fighting over grows. And that’s a lost art for a lot of investors in turnarounds. There aren’t many real turnaround experts anymore.
“And that is how you make tons of money in my subsector. We’ve done that pretty well. We’ve invested in a few businesses in the last few years where we had control that we’ve turned around.
“Our biggest short going into Covid was Hertz, it’s now the largest long we’ve ever had in the history of the firm. You’ve got to find what you’re good at and what you love and apply it to your strategy.”
When can we expect official confirmation?
It is difficult to put an exact timeframe on it, but it is estimated that the circular will be processed in the final week of June. From there, confirmation that Wagner’s takeover has been approved by shareholders should arrive within two weeks.
It is reasonable to think that Wagner and Co will be in place when the Championship season starts on August 5 if everything goes to plan.
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