Coventry City pulled off a transfer coup against their arch rivals Aston Villa yesterday by signing the 19-year-old Republic of Ireland forward Robbie Keane for less than the £6 million Wolves had demanded from the Birmingham club.

The move represents an act of retaliation by Wolves and Coventry against the Villa manager John Gregory, who has upset both clubs by his recent activities in the transfer market.

Neither Wolves nor Coventry would reveal how much the deal was worth, but the City chairman Bryan Richardson said: "We have agreed a fee with Wolves for Keane, and the transfer terms have also been settled."

John Richards, the managing director of Wolves, added: "I can confirm an offer has been received from Coventry that is acceptable to our board of directors."

Keane stayed in Wolverhampton yesterday while his representative travelled to Highfield Road to discuss personal terms with the Coventry board. It is believed Keane's salary will rise from around £4,000 a week to nearly £15,000. He is likely to make his Premiership debut in Coventry's next home game against Derby County on Saturday.

Originally Gregory had offered £5 million for Keane and when that was rejected he increased the bid by £500,000. But that was not acceptable either and Richards insisted: "We will not take a penny less than £6 million."

Last weekend Gregory said he had lost patience with Wolves and had withdrawn his offer. Richards responded by saying "good riddance to Villa. They have been very unprofessional in their dealings with us."

Gregory upset Coventry over the George Boateng deal and Richardson alleged that an illegal approach had been made for the Dutchman before the £4.5 million move was completed, although Villa denied it.

Middlesbrough were also keen to acquire Keane. They made an offer of £6 million in the summer which was accepted by Wolves, but Keane decided against the move.