The long-awaited takeover of Watford Football Club took a major step forward this week.

It was announced yesterday Watford FC Limited, which was set up by highly-respected orthopaedic surgeon Panos Thomas and will be financed by close friend Laurence Bassini, is set to make a cash offer for the Hornets’ parent company, Watford Leisure Plc. The imminent bid for the club has already been accepted by most of the major shareholders.

The new company, which was created in January solely for the takeover, has had its offer of 1p per share accepted by Lord Ashcroft – whose company Fordwat Limited controls 37.16 per cent of the club’s shares – and Graham Simpson and his wife Yianna, who own 8.24 and 8.55 per cent respectively.

A 36-page document, released to the Stock Exchange yesterday, confirmed that if the takeover is completed Graham Taylor will remain as chairman.

It also revealed three significant developments to the Vicarage Road Stadium.

It is claimed Watford’s directors have held “extensive discussions” with Mr Bassini and Mr Thomas and the pair plan to complete the half-built south-west corner, re-lay the out-of-date pitch and build a new East Stand.

However, the announcement did state: “It is WFCL's current intention to support these plans, but the timing of their implementation and the preferred method of funding the improvements have yet to be confirmed or finalised.”

It was confirmed Taylor and former chairman Stuart Timperley will remain with the club and the parent company’s board though if a takeover is completed.

Chief executive Julian Winter and director David Fransen will stay on the club’s board but will resign as Watford Leisure directors, a move intended to ensure that Bassini, who will not be a director, will have the three-to-two majority at board level, with two new directors being appointed.

Should the takeover go ahead, Thomas will be joined on the board by Hertsmere Borough councillor and former mayor Sandra Parnell and solicitor Anthony Samuels, who is business development consultant for law firm Howard Kennedy, which is one of the companies advising Watford FC Ltd.

Watford FC Limited says it plans to run the club from its current location and does not have any plans to sell fixed assets and expects the existing members of the senior management to remain.

The announcement also confirmed Bassini and Thomas intend to stick to the club’s current business plan, which is aimed at making Watford a sustainable club.

The takeover of Watford is a little more complicated than many other clubs due to the £10.142m bond issue which is due for repayment on July 12.

The club consolidated all of its debt last summer into a one-year-long bond issue. For each £1 bond there are 20 detachable warrants which can be sold to create new shares.

This has meant Watford FC Limited’s offer for the current shares is considerably less than what they were worth.

Bassini has had his offer of 1p per share accepted by Lord Ashcroft and the Simpsons despite the shares being worth 4p the night before yesterday’s announcement, which amounts to a 75 per cent drop. And it was 7p a share when Watford FC Limited’s interest was first revealed in December, which is an 85.7 per cent drop.

This means Bassini and Thomas look set to obtain a 53.95 per cent stake in Watford Leisure for £440,000.

But the current shareholding becomes almost irrelevant if all the warrants are activated as it would create 202,840,000 new shares. There are currently 43,885,693.

And Watford FC Limited has already entered into agreements with the warrant holders where the company will receive all of them for the nominal fee of £1 per bond holder.

The initial plan was for the bonds to be sold and the warrants activated at 4p each, to help clear the club’s debt.

The warrants will remain exercisable until July 2015 but instead, Watford FC Limited will pay off the bonds with fixed instalments over a five-year period.

On the day the offer becomes “wholly unconditional”, £1m will be repaid and then for five years on the anniversary of the first payment, another instalment will be made, ranging from £3.182m in the third year to £1.025m in the fifth.

Watford FC Limited has received “irrevocable undertakings” from the major shareholders that they will accept the offer and the agreement will remain “binding” even if a better bid comes along, unless the offer documentation is not published within 21 days, if the offer “lapses” or if it is withdrawn.

The document states the £440,000 for the shares will be “fully paid or credited as fully paid” by Bassini and his aim is to remove Watford Leisure from the Stock Exchange, which is something Taylor wanted and former chairman Jimmy Russo was also keen on when in charge.

Bassini and Thomas need a 75 per cent shareholding to remove Watford Leisure from the Stock Exchange and, whilst the Russo brothers currently control 29.98 per cent, if all the warrants are activated then their stake is diluted and Watford FC Limited will have 91.81 per cent of shares.

The independent directors, on the advice of financial adviser Strand Hanson, recommended shareholders do not accept the offer because of the huge drop in price. But they did recognise the likelihood of Watford Leisure being taken off the Stock Exchange if the warrants were activated.

Whilst yesterday’s announcement is a huge step towards the takeover being completed, it is not a certainty that the deal will be done.

Should the takeover not go ahead, the Hornets’ board and major shareholders will be desperate to find a new investor as it was also revealed the club has a shortfall of approximately £3.5m after deciding not to sell any players in January.

Bassini has said Watford FC Limited will cover the shortfall if the offer becomes “wholly unconditional” from his “existing resources”.

But if the takeover is not completed then the club will have to look at financing from existing shareholders, directors, new investors or another source.