UK - Gresham to back MBO of listed Formation Group

The management team, who will outline the deal for shareholders in the coming weeks, is led by chief executive Neil Rodford, Peter Powell and Kevin Moran. Shareholders are expected to be offered approximately 11 pence per share, and 80% premium to Friday's closing price of 6.5 pence. If investors okay the deal, the transaction could be completed by June.

It is reported that Gresham is looking to buy five of the company's seven subsidiaries including talent management businesses James Grant and Proactive Sports Management. The construction and asset management arms of the company will not be included in the deal.

Cheshire-based Formation Group was founded in 1987. The company, whose market value has declined more than 70% in the last year, has faced a number of problems lately. Last November, Formation lost £11.6m when Icelandic bank Landsbanki collapsed after agreeing to provide the company with £93m in financing for a construction project.

In July 2008, the company's founder Paul Stretford also received an 18-month suspension by the Football Association and a £300,000 fine for signing Wayne Rooney before walking away from the business four months later, taking with him some big-name clients.

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