Exclusive: Mandaric offer rejected by former Sheffield Wednesday chairman Allen

Allen, who is owed a total of 2.4m, said an offer of around 250,000 had been made during a meeting with an associate of Mandaric, the current Leicester City chairman, towards the end of last week.

As the club embarks on the most critical week in its recent history, the Yorkshire Post understands the Mandaric approach involved an offer of 8m to the Co-operative Bank, which is owed around 25m by the Owls, but significantly smaller offers, proportionate to debt, to directors and former directors with outstanding loans in the club.

It is believed the bank and some of the other loan-note holders were receptive to the offer on the table but Allen and at least one other were not.

The Owls face a winding-up petition over unpaid tax on Wednesday and are desperate to push through a takeover as soon as possible to stave off the threat of administration.

Any takeover offer is almost certain to involve the bank and the six other key loan holders taking considerably less than they are owed but any offer is likely to stand or fall on obtaining agreement across all parties.

The only outside alternative is an investor offering to inject capital directly into the club to keep it afloat and take control.

One UK-based investor has offered around 5m to do so but that would leave the club with the same level of debt and maybe unattractive to the bank, who are currently the powerbrokers in any deal.

Current directors Geoff Hulley, Ken Cooke and Bob Grierson plus former directors Keith Addy and Mick Wright all have outstanding loans in the club, though all smaller than Allen's.

The former chairman, who is now majority owner of

Chesterfield, last night reiterated he would forego around 900,000 interest due on his outstanding loans and accept three instalments of 500,000 to pay off the 1.5m he loaned in the first place. In return, he would give away his remaining 9.5 per cent stake in the club for nothing.

On the Manadaric offer, he said: "It was a derisory offer and I wasn't prepared to listen to it."

Any approach from Mandaric is complicated by his continued involvement at Leicester, though he is reported to have sold his interest in the East Midlands club, and potential fallout from outstanding charges of tax evasion, which he denies.

Mandaric did not respond to a request to comment.

It is not known if the initial rejection by Allen and at least one other loan-note holder has actually now ended his interest in investing in Wednesday.

On Friday afternoon, Mandaric issued a statement saying he was "not currently in discussions regarding the purchase of Sheffield Wednesday."

Wednesday declined to comment last night and the Co-operative Bank said it could not comment.

An earlier approach from a consortium led by Dubai-based businessman Kevin Mundie appears to have stalled after Mundie withdrew his interest.