Smith who is heading up a small group of investors, has studied club???s financial figures, and he has been working on proposed deal since March last year.
Former Arsenal and England captain Tony Adams has also been linked to the bid but it is understood his involvement would be in a football advisory role.
According to Sky News??? Mark Kleinman, Adams and Smith are said to have formed a new company called Halo which they intend to use as a vehicle to acquire Aston Villa and minority stakes in other leading football clubs.
One City source said on Thursday that Portugal’s Sporting Lisbon and Italy’s Internazionale were among the other clubs in which Halo was likely to express an interest.
It is unclear whether they have yet secured financial backing for their plans.
Aston Villa have effectively been up for sale for more than a year, with Randy Lerner, the American tycoon who bought the club for just over ??60m in 2008, keen to sell.
Last year, Lerner appointed Bank of America Merrill Lynch to handle an auction of Aston Villa, and dozens of parties are since said to have lodged an interest.
Lerner has ploughed millions of pounds into the West Midlands club, and after some initial success in the form of several top six Premier League finishes, Villa have fought a persistent battle against relegation.
Neither Adams nor Smith could be reached for comment, while BAML declined to comment.