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Tuesday, December 15, 1998 Published at 14:42 GMT

Business: The Company File

Newcastle in £160m takover

The club has had problems on and off the pitch

Football club Newcastle United has confirmed that it has been approached about a possible £160m takeover bid for the company.

BBC's Sports Correspondent Paul Newman discusses the potential suitors
The club has not named the company involved in the approach but rumours suggesting Sony Corporation is the bidder in question have been officially denied by the Japanese electronics giant.

[ image: Fans are worried about the future - on and off the field]
Fans are worried about the future - on and off the field
Newcastle has told the London Stock Exchange that any bid would not proceed until the outcome of the merger inquiry into BSkyB's takeover of Manchester United was known.

This suggests another media company may be the potential bidder - some of which are known to be interested in Premier League club ownership as a counter to BSkyB in future TV rights carve-ups.

Media companies Granada, Carlton, United News & Media and Time Warner of the US have all been speculated as possible bidders, along with local firm Scottish & Newcastle Breweries.

Alternatively, some analysts say controversial directors Freddie Shepherd and Douglas Hall, majority shareholders in the club, may be preparing a bid that would privatise the company in their hands again.

Don't bank on it

Sports Minister Tony Banks outlines his concerns about the deal to the BBC
Sports Minister Tony Banks told the BBC that he had some concerns about the possible deal and said that the government was bound to launch an investigation into any takeover bid.

He said that football takeovers were inevitable once the clubs joined the stock market. However Mr Banks told the BBC: "The football fans feel that they are not involved in the process whatsoever. As a football fan as well as a sports minister, I don't really believe that football can be treated like any other economic be bought and sold like motor cars of refrigerators. There is more passion involved."

Not fans of the deal

Fans were also sceptical about the potential takeover.

Kevin Miles of the Newcastle United Independent Supporters Association, said: "Nobody should be under any illusions that any company comes in to buy a football club as a favour to ordinary fans."

Bid speculation

Ongoing rumours surrounding ownership of the club had earlier resurfaced with the Daily Mail newspaper reporting that Sony had made a 160p per share bid last week.

Shares in the club jumped 15% in early trade on the rumours, prompting the club to make a statement to the stock exchange.

The statement said: "The company confirms that a preliminary approach has been made which may or may not lead to an offer for the club."

The club said it understood that any offer would not be much over 110p a share.

At 1150 GMT, Newcastle shares had fallen sharply to 100p from an earlier rumour-fed rise to 120p.

Board controversy

The club's direction has been under a cloud in the wake of the resignation from the board and later reinstatement of Mr Shepherd and Mr Hall . They were forced out in July over disparaging comments they made about players and fans became public.

However, the two voted themselves back onto the board last week prompting the resignation of chairman Denis Cassidy and directors John Josephs and Tom Fenton.

Newcastle United was floated on the share market last April at a price of 135p a share.

Any offer is unlikely to materialise for weeks, if not months.

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