Villa rejects £30m bid from former footballer

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The Independent Online

Aston Villa has received a £30m takeover approach led by Ray Ranson, the former Manchester City footballer turned financier.

Aston Villa has received a £30m takeover approach led by Ray Ranson, the former Manchester City footballer turned financier.

The Midlands club said yesterday it had rejected the approach but its disclosure, prompted by a report in The Independent, is likely to spark interest from rival bidders while Mr Ranson is understood to be keen to pursue a deal.

Jack Petchey, the property entrepreneur who has been building a 16 per cent stake in the club, will also be monitoring developments closely.

Mr Ranson's involvement will be of significant interest to the football industry. He has pioneered a form of player financing over the past few years that has helped a number of clubs, including the financially stricken Leeds United, buy players as inflation in the transfer market took off.

Leeds United used Mr Ranson to help provide finance for the purchases of players such as Michael Bridges, Michael Duberry and Danny Mills.

Yesterday's statement from Aston Villa, in effect, puts the business up for sale after it emerged that Mr Ranson and his business partner, ex QPR chairman, Richard Thompson, have for some time been holding talks with Doug Ellis about buying Aston Villa chairman's 38 per cent stake.

Mr Ellis has been under fire from supporters for his running of the club and last year the Birmingham-based club was connected to rumours of a bid from a Venezuelan billionaire.

Mr Ranson's offer is understood to have been pitched at a premium to Wednesday's closing price of 232.5p. The shares jumped yesterday to a four-year high of 250p valuing the business at £28.7m. Mr Ranson's indicative proposal is understood to value the business at about £30m.

The talks with Mr Ellis have been going on for about three months but collapsed after the two sides failed to agree a price for Mr Ellis's stake. Yesterday, the club said: "Having considered the proposal and consulted with advisers, the boards view is that it significantly undervalues Aston Villa and the proposal has been rejected."

Under the chairmanship of Mr Ellis, known as "Deadly Doug" to fans and numerous ex-managers, the club has avoided the financial problems of many rivals but it has not been the most financially successful operation. However, the main value to a bidder is Villa's property land bank valued by the club at £40m. Analysts believe it could be worth substantially more than that when developed.

Mr Ranson's approach for Villa cements his reputation as an increasingly influential figure in the football world. After injury brought a halt to his career at Manchester City he went to work in the Square Mile. Mr Ranson joined Benfield Grieg, the insurance company run by Matthew Harding, who was also vice chairman of Chelsea.

It was while working for Benfield Grieg that Mr Ranson developed his player transfer financing schemes, known as sale and leaseback arrangements. They work by a club agreeing to hand over ultimate control of a player's registration to a bank as a form of security.

In return the bank makes a cash payment to the club allowing it to pay for the player. The club then leases the player back from the bank in exchange for a regular fee. If the player is sold the club pays off the loan with the proceeds and keeps any profits. The bank takes out an insurance policy to protect its position if the value of a player falls below the value of its loan.