Shares in Caspian Group were suspended after the company said it was in discussions that could lead to it acquiring a controlling stake in Leeds United. Caspian is owned by leading investment groups including Schroders, Mercury Asset Management, London and Manchester, and Guardian Royal Exchange.
Chris Akers, the former Swiss Bank corporate financier and Caspian chairman, was understood to be in Leeds yesterday to finalise the terms of a deal that would see the group pay pounds 10m for a 65 per cent stake in the club owned by Bill Fotherby, Leeds chairman, and Eric Silver, his predecessor.
Caspian is also said to be keen to take on the club's pounds 10m debt. It would fund the deal through a placing of shares with institutions.
Buying Leeds United would more than double the size of Caspian and represent the first step in transforming it from a television production and animation company into a large sports and leisure group.
News of the takeover approach for Leeds came as shares in Manchester United and Tottenham Hotspur hit record highs after a report in Saturday's Independent said the Premier League's 20 clubs could share in a pay-per- view television bonanza worth up to pounds 2.5bn a season. Shares in Manchester United climbed 35p to 400p, while Tottenham Hotspur soared 51p to 429p.
The confidential report from polling firm Harris has encouraged top teams to hold out for a far more lucrative deal when the broadcast rights to live Premier League football matches from 1997 are discussed at a key meeting of club chairmen in Coventry later this week. The current contract is held by BSkyB.
Based on a sample of 4,000 viewers from around the country, Harris found that League and FA Cup winners Manchester United could earn up to pounds 382m a season if all matches were transmitted at various times of the day at pounds 10 a time. Next would come Liverpool and Arsenal, who would receive pounds 339m and pounds 190m respectively, followed by Leeds (pounds 162m) and Tottenham on (pounds 121m).
These figures dwarf the pounds 60m the League as a whole received from all television deals last season and are fuelling renewed interest in football clubs as serious investments.
Two other potential bidders have already emerged for Leeds: Paul Sykes, a local businessman, and Barry Rubery, co-owner of Pace, the satellite decoder machine company about to be listed on the stock market. Both are regulars at Leeds' Elland Road ground.
QPR, relegated from the Premier League last season, is also up for sale.