Birmingham City FC reject £12m offer in takeover bid

Birmingham City have rejected a £12m takeover bid from Gianni Paladini and Flavio Briatore – sparking a bidding war for Blues today.

Owner Carson Yeung is reportedly holding out for £40m – half of the £81.5m he spent buying Birmingham three years ago.

Ex-Formula One boss Briatore and Solihull-based Paladini rescued QPR from extinction and took them to the Premier League before selling to Tony Fernandes last year.

Their offer has been immediately dismissed but Yeung may have to accept if he is found guilty when he faces trial on charges of £59m worth of alleged money laundering in November.

There is interest from the Far East but Briatore and Paladini are the first to show their hand.

Yeung is Birmingham International Holdings Limited's biggest shareholder with a 26 per cent stake after he pumped a £13.7m loan into the club. There is also an outstanding loan of £7.8m owed to BIHL and Yeung would want to have those covered in any deal.

Yeung is keen to sell after a troubled spell which has seen Blues dogged by financial problems, despite winning the Carling Cup in 2011 to earn a Europa League place.

They were hit by a transfer embargo last season after failing to file their accounts on time followingg relegation from the Premier League.

Blues, who go to Nottingham Forest in the Championship on Saturday, have been seeking new investment for months.

Paladini was at QPR for eight years and helped arrange Briatore's takeover with F1 supremo Bernie Ecclestone in 2007.