Shares in Leeds United yesterday followed the form of the football team it owns, crashing 23 per cent after a statement said there was no prospect of a bid emerging for the company's equity.
However the board of Leeds did say that constructive discussions were continuing with a number of parties which might lead to a deal to save the stricken Premiership club from administration.
The club's finances are on the verge of collapse and the company has until Monday to put together a rescue package that will save it from a fire sale at the hands of administrators.
The statement yesterday said proposals were being discussed regarding the purchase of the company's business and assets or to inject emergency funds. "However, none of these interested parties' proposals contemplates an offer for the company's shares."
One interested group is understood to be led by Allan Leighton, the chairman of Royal Mail and a former director of the club who stood down to explore a potential deal.
Analysts believe yesterday's statement means that the potential rescue deals would involve buying the Leeds United operating company but not the holding company, possibly with a deal to lease the Elland Rd stadium back from the club's bondholders, who are owed £60m.
A second possibility is for a minority shareholder to support a rights issue to inject fresh funds into the club. However, such a move would have to result in the shareholder owning no more than 29.9 per cent of the outstanding equity, otherwise a full bid would be triggered for the company's shares which now seems to have been ruled out. Such a move would dilute the holding of other Leeds shareholders but might be the only way of ensuring the club's survival.
In October Leeds announced a loss of £50m, the biggest in English football history. It said its debts were £80m and had not fallen despite the sale of several key players including Rio Ferdinand to Manchester United for £33.3m.
Many of the club's players are actually owned by offshore companies controlled by banks and are leased back to the club.
The club borrowed heavily under previous chairman Peter Ridsdale to compete at the highest level, but a failure to qualify for the Champions League wrecked its brittle finances and the club is now staring at relegation from the Premiership, which would spell financial disaster.
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