Leeds ultimatum for Sainsbury

Sebastian Sainsbury's on-off £25m takeover of Leeds United was yesterday thrown into doubt again despite the Leeds chairman, Gerald Krasner, saying that he had seen "sufficient documentation" of funding.

The American-backed consortium hoping to buy Leeds United was told yesterday it has until 1pm on Friday to complete a £25m buy-out or else the board will sell Elland Road that afternoon to a buyer who is already lined up.

An informed source revealed that this ultimatum was delivered yesterday in a meeting between the Leeds directors Simon Morris and Melvyn Levi, and Michael Lucas, the president of Nova Financial Partners, the US-based firm that is backing Sebastian Sainsbury's bid to become the Leeds chairman.

Leeds and Nova issued a joint statement last night confirming a deadline of 1pm Friday but making no mention of the Elland Road ultimatum. The statement said: "Nova have agreed to transfer £25 million into their solicitors' bank account by the end of Thursday and this transaction will be verified at such time by Leeds United's solicitors.

"Provided the funds are verified, Nova confirmed it would complete a deal with the club on or before 1pm on Friday."

Gerald Krasner, the Leeds chairman, added: "The intention of the board is to secure the best possible future for the club and we look forward to completing a successful deal on Friday."

Lucas said: "We are looking forward to completing the contract and working towards Premiership status. No further comment will be made by either party or anyone representing either party until either completion or the deadline for completion has passed."

The statement came after a day of on-off developments with Nova's bid. It seemed on course for success yesterday morning when Krasner said he had seen "sufficient documentation" of Nova's funding.

A hiccup arrived at lunchtime with the surprise appearance on the scene of the former Leeds managing director, David Richmond, who resigned in July. At a lunchtime meeting with Lucas, Richmond claimed that he is part of the Leeds negotiating team. It is understood that Richmond wanted to introduce new conditions to the sale to Nova. These were deemed to be problematic.

Nova were then put under intense pressure last night to complete due diligence, contract details and payment by Friday or, apparently, see Elland Road sold, perhaps as part of a deal involving a consortium led by the local businessman Norman Stubbs.

Nova insiders remain hopeful of completing the takeover, but are "not assured of it yet".

The Leeds board is under pressure to raise cash from somewhere to repay loans arising from their own buy-out. Friday is a key repayment date.