Barnsley boss Simon Davey has revealed that Kevin Phillips rejected a move to Oakwell in favour of joining Championship rivals Birmingham.
The former England striker opted to sign a two-year contract with Birmingham after failing to persuade West Brom he was worthy of a similar deal at The Hawthorns.
Barnsley were eager to bring the 34-year-old to South Yorkshire and had put together an offer to challenge Birmingham's bid.
"We have been talking with Kevin and his agent since the end of last season when we learned he was available," Davey told the club's official website.
"He was very interested in what we had to say and we put an attractive two-year package to Kevin, which meant that his decision to join Birmingham was not about money.
"Kevin's agent phoned me this morning to say that he has decided to join Birmingham City. It means that Kevin does not have to move his family from the Midlands and he believes that City, with their parachute payments from the Premier League, have a better chance of winning promotion next season.
"I am disappointed for the fans here at Barnsley because Kevin would have been an amazing signing for this football club."