Gulf Finance House is leading a deal to help acquire the English Championship team Leeds United Football Club (LUFC) on behalf of an unnamed investor.
The Bahraini Islamic investment bank publicly disclosed its participation in the deal yesterday, after months of speculation over the club's future.
"GFH would like to confirm that GFH Capital, a 100 per cent subsidiary of Gulf Finance House, has signed an exclusive agreement to lead and arrange the acquisition of Leeds City Holdings, the parent company of LUFC," the bank said in a statement to the Bahrain bourse. The statement did not provide financial details of the takeover. Salem Patel, the bank's head of investment management, declined to elaborate, citing a confidentiality agreement.
The disclosure follows months of speculation among Leeds fans over the club's future, after two GFH Capital executives were photographed at a game last month and reports circulated of a takeover.
Discussions between the club and potential investors are in an "advanced stage", said the Leeds chairman Ken Bates.
"There's a number of finer points to be resolved but we're making good progress," he said. "The potential investors are looking to conclude things as soon as possible. Both parties regret missing the August transfer deadline but we are planning for the January transfer window."
In 2008, Manchester City was taken over by Sheikh Mansour bin Zayed, culminating in the team winning the English Premier League last season. Qatari investors have bought into France's Paris St-Germain and Spain's Malaga, while a Kuwaiti family acquired England's Nottingham Forest in July.
The investors cited in the Leeds deal were described as a "banking institution" and a public company with interests in the Arabian Gulf, Asia and Africa.
Leeds United was forced into a standstill agreement on its debts in 2004 before being relegated from the Premier League that year.
The club was relegated again to the third-tier League One in 2007 before clawing its way back to the Championship in 2010.
Despite that, Leeds has been described as a sleeping giant, with one of the United Kingdom's most loyal fanbases and a stadium capacity of almost 40,000.
While investment in Premiership teams has been constrained this year by Uefa's financial fair play regulations, intended to ensure teams with wealthy owners do not enjoy an unfair advantage, Championship teams that do not play in the Uefa leagues are not bound by the same rules.
However, Gulf Finance House said a return to the Premier League for Leeds United, which won the old First Division championship, the forerunner of the Premier League, three times from 1968 to 1992, would help it boost its return on investment. In 2001, the club also reached the Uefa Champions League semi-finals.
"It is expected that, from next season, each team in the Premier League will receive a minimum of £60 million (Dh357.2m) per season due to the increase in broadcasting rights," the GFH statement said. "LUFC would also benefit from this if it can achieve promotion to the Premier League."
A Leeds United spokesman did not respond to requests for comment.
Gulf Finance House has struggled since the global financial crisis hit and left it with stalled projects in Dubai, Bahrain, Libya and Syria.
It returned to profit last year and generated income of US$4.7m (Dh17.2m) during the second quarter of this year compared with a quarterly loss of $11.2m during the same period a year earlier.
But the bank's auditors at KPMG have warned for several quarters Gulf Finance House's debts outstrip its assets, a factor that may "cast significant doubt about the group's ability to continue as a going concern".
The bank reached agreements to restructure $155m in debt this summer and has attempted to turn around its fortunes through increased shareholdings in profitable subsidiaries and planned sales of non-core assets.