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West Brom sale talks end in stalemate after US approach

by 15/09/2017 18:38:00 0 comments 1 Views
  • Representatives of Gaochuan Lai assumed control of the club last September
  • American consortium made an approach for the 88 per cent stake in the club 
  • The two parties entered into discussions about a possible sale of the Baggies

By Sam Morshead For The Daily Mail

Published: 18:31 EDT, 15 September 2017 | Updated: 18:38 EDT, 15 September 2017

West Brom's owners have rebuffed an offer for the club just a year after taking over at The Hawthorns.

Representatives of Gaochuan Lai, who assumed control of the West Midlands side last September, had been in talks over the possibility of selling the majority shareholding in the Baggies until negotiations ended this week.

Sportsmail understands an American consortium made an approach for the 88 per cent stake in the club currently held by Lai and other investors via their Yunyi Guokai (Shanghai) Sports Development Limited holding company.

West Brom's owners had been in talks over the possibility of selling the majority shareholding
West Brom's owners had been in talks over the possibility of selling the majority shareholding

West Brom's owners had been in talks over the possibility of selling the majority shareholding

And the two parties entered into discussions about a possible sale.

Contact was first made during the summer and continued through the early weeks of the 2017-18 campaign but no deal could be agreed.

Lai's group paid £175million for their stake in the club but are believed to now value the Baggies at around £260m. In the event of Yunyi Guokai's shares being sold in their entirety at that price, Lai and his fellow investors would be in line to make a profit of more than £50m. 

Although the interest has come to nothing, the fact that the Baggies' owners were willing to initially engage is of interest.

While any motivation to sell could be based on the potentially impressive return on his investment, there are also politics at play.

Last month, China's state council formally placed sports clubs on a widening list of overseas industries in which Chinese investment is restricted - alongside property, film, hotels and entertainment - in an effort to limit 'irrational' spending on projects outside the country. 

Tony Pulis' men have made a strong start to the season and currently sit ninth in the table
Tony Pulis' men have made a strong start to the season and currently sit ninth in the table

Tony Pulis' men have made a strong start to the season and currently sit ninth in the table

While such investment is not banned, companies interest in acquiring a slice of Europe's football pie face significantly more substantial checks and balances from state regulators than before.

The situation is tense, with investors not wanting to be seen to be acting against the wishes of the state, while Chinese owners wishing to inject money into their clubs will now find themselves having to jump through loopholes to do so.

This perfect storm, plus the possible profit margins on offer through a quick sale, could give Chinese investors across Europe encouragement to sell up.

 

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