Relegation fears scare off potential Leeds bid

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The Independent Online

One of the two Yorkshire-based consortiums hoping to save Leeds United yesterday announced it had scrapped its plans for a bid. With Leeds facing the expiry of their latest "standstill agreement" with their major creditors at 2pm this afternoon, that leaves only one consortium in the running. But following doubts about the credibility of that group - and what role, if any, is being played by the former Bradford chairman Geoffrey Richmond - Leeds' future looks shakier by the minute.

Despite yesterday's setback, the Leeds chief executive, Trevor Birch, remains hopeful he will find a solution to the club's financial crisis. A senior source at Elland Road said that Birch hopes to secure another fortnight's extension to their standstill agreement, and further extensions as necessary through March and April.

Leeds' major creditors - bondholders and a financing firm owed £80m between them - are not intent on forcing Birch to choose between selling the club or applying for administration just yet. That decision will have to be made before the end of the season but all parties realise that Birch has a better chance of finding the right buyer once Leeds' status next season has been confirmed.

If they manage to avoid relegation and can guarantee Premiership football next season, Leeds will be immediately more attractive to a range of potential investors. Birch is understood to feel that an early sale at a knock-down price on the assumption of relegation risks the club being sold too cheaply and not necessarily to the right buyers.

The group that withdrew its interest yesterday was the so-called "second Yorkshire consortium", comprised of wealthy local businessmen and advised by Zeus Capital Limited, a corporate finance firm.

"Following our financial investigations we have reluctantly concluded that the consortium will not be making a proposal regarding Leeds," Richard Hughes, a Zeus director, said. It is thought the group had access to the £25m needed to satisfy the creditors straightaway but had reservations about the impact of relegation.

Gerald Krasner, a spokesman for the other consortium, which tabled a bid of around £20m three weeks ago and is involved in ongoing talks with Leeds, said: "Things are progressing and we're further on than we were last week. If we weren't progressing then we would be pulling out, so we are still optimistic." No deal with Krasner's group is believed to be imminent.

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