Thai bid for City could make £50m available for new players

Thaksin Shinawatra, the billionaire former prime minister of Thailand, has moved into pole position in the battle to buy Manchester City after outlining a £130m takeover package to the board that could see as much as £50m available to spend on players in the summer.

No bid will become formal until the completion of due diligence. City granted permission for that last night. Sources close to negotiations said yesterday that Thaksin's approach is a "proper offer" that puts him "way ahead of other parties at this stage". Crucially, it is understood that Thaksin has proved that he has the cash ready and waiting to do a deal.

Insiders insist that if Thaksin does take control, it is unlikely that Sam Allardyce, who has just parted company with Bolton Wanderers, will be installed as the new manager. Stuart Pearce might be given the chance to argue his case to remain in charge. Even if he failed, Thaksin would probably prefer to hire an experienced European coach but Sven Goran Eriksson is not on his radar, sources say.

The Thai approach does not come without baggage. In 2004, Thaksin, 57, was involved in unsuccessful talks to buy Liverpool. He said at the time that he was a Liverpool fan but there were doubts about his motives and funding. It was suggested that he primarily wanted to take control at Anfield as an electioneering tool as the Premiership is very popular in Thailand.

It was also unclear how his Liverpool buyout would work at that time, and whether he would use private money or state funds. Human rights campaigners also accused Thaksin's administration of various offences, especially in relation to a hard-line anti-drugs campaign. Human Rights Watch said this led to more than 2,000 extra-judicial killings in 2003.

Before entering politics, Thaksin had a successful career in the Thai police and thrived as an entrepreneur. He established a communications firm, the Shin Corporation, which he sold last year for £1bn. His personal fortune is estimated to be worth double that.

Since being overthrown by a military junta in a bloodless coup last September, he has lived abroad in exile. He has recently bought a house near London but travels extensively.

Any deal will rest on whether Thaksin can convince City's chairman, John Wardle, that he is a serious, long-term investor. Wardle and his business partner, David Makin, own 29.75 per cent of the club between them. They are also owed around £21m in private loans to the club, which any buyer would need to repay.

Buying all the club's shares - if a formal bid is made, recommended and accepted - would cost up to £25m. External debts in the form of long-term bonds (effectively mortgages against future income) amount to around £40m. Thaksin might choose to clear this, but would not be obliged to. Thaksin is apparently prepared to spend a further £50m on players to help City push for a European place.

City have been courting bidders for six months. The only other named group to have made any progress in talks is a consortium led by former City defender, Ray Ranson. But despite Ranson making a variety of "indicative offers", City's board has made it clear that nothing he has offered so far has been remotely attractive. Particular concerns include the amount of money available for a transfer kitty, and the potential levels of debt and risk involved in a Ranson takeover, which would be funded by Sisu Capital, a hedge fund whose priority would making a profit.

Sources say Thaksin, a genuine fan of football, if not City, is motivated by the Premiership's huge earning potential in Asia, especially in Thailand. City are hoping his offer becomes the real deal because he has shown more urgency in recent days than anyone, including an American group who have been weighing up a lesser bid for months.

From burgers to billions: rise of a Thai kingpin

Thaksin Shinawatra was born in 1949 in Chiang Mai and, after graduating from the Thai Police cadet academy, earned a scholarship to take a Master's degree in criminal justice at Eastern Kentucky University in the United States. He also received a doctorate from a Texas university and returned home to pursue a career first in the police (where he rose to a senior position before resigning in 1987) and then business.

He founded and grew a huge communications firm, Shin, sold last year for almost £1bn. He founded his Thai Rak Thai political party in 1998 and swept to power in 2001. Populist but controversial, he became the first elected prime minister in Thai history to complete a full term in office and was re-elected in 2005. It was during the run-up to the later election campaign that he tried to buy Liverpool in a bid that failed over doubts on funding and what day-to-day control he wanted.

There are no doubts he is a genuine football fan and Premiership follower (as are many millions of Thais), and he has been known to play in exhibitions. Ousted in a coup last year, he lives in exile. He is married and has one son and two daughters.

While he has much experience as a powerful politician, past jobs as a coffee vendor (as a child) and at Burger King (while a student) show a humbler side.