Sale of Chelsea FC: Dividend ban and debt limits included in ‘anti-Glazer’ takeover deal | Economic news


The new owners of Chelsea Football Club would be barred from paying dividends or levying management fees for a decade as part of a package of measures aimed at avoiding the controversies that have plagued Manchester United since the Glazers takeover in 2005.

Sky News can exclusively reveal that a consortium majority-funded by private equity firm Clearlake Capital and led by US financier Todd Boehly is in talks on an unprecedented set of terms as part of its £4billion takeover of the Blues of pounds sterling.

Sources familiar with the offer said on Friday that the Clearlake-Boehly group was in advanced negotiations with Chelsea advisers over measures that would include: banning them from paying dividends or management fees until 2032; prohibit the sale of any share of the club for 10 years; and agree to strict limits on the level of debt they could take on.

In line with other final bidders for last season’s Champions League winners, it has also committed a minimum additional investment of £1billion in its stadium, academy and women’s team.

Raine’s demands highlight the unusual nature of the chelsea sale process at a time when the ownership of English football clubs faces unprecedented government intervention in the form of a putative independent regulator.

An insider called the measures “anti-Glazer clauses” designed to ensure Chelsea’s financial stability in the post-war period.Roman Abramovich time.

The Clearlake-Boehly consortium, which was selected as Chelsea’s preferred bidder a week ago, could sign a binding deal to acquire the club as early as Friday, although the signing could still be delayed for several days.

Further details of the terms attached to the deal were unclear, although a source said debt limitations would allow the club to borrow ‘several hundred million pounds’ for working capital .

The purchase price of around £2.5billion for the club would be fully equity funded, the source added.

The £790m takeover of Manchester United by the Glazer family has burdened the club with costly debt known as in-kind payment notes, and provided a focal point for fan protests, which intensified following the retirement of Sir Alex Ferguson in 2013.

Manchester United went public on the New York Stock Exchange a decade ago, with the Glazers extracting hundreds of millions of pounds from dividends and share sales while they were held.

Joel Glazer (right) and Avram Glazer (left)

The set of provisions would, if accepted, represent a bold gamble on the part of Chelsea’s new owners, especially as Clearlake has a financial imperative to provide returns for its investors.

On Thursday, Mr Abramovich issued a statement refuting reports he was seeking repayment of a £1.5billion loan from the club.

He also said he did not “raise the price of the club [at the] last minute”, although the three short-listed bidders were told of a request for an additional £500m during meetings last week.

“Following the sanctions and other restrictions imposed on Mr Abramovich by the UK since the announcement of the sale of the club, the loan has also been subject to EU sanctions, requiring further approvals,” said a spokesperson for Mr. Abramovich.

“This means that the funds will be frozen and subject to a legal procedure governed by the authorities. These funds are always intended for the Foundation. The government is aware of these restrictions as well as the legal implications.”

Sky News revealed earlier this week that Clearlake would own around 60% of Chelsea shares in a restructured deal with LA Dodgers co-owner Mr Boehly and fellow investors, including Swiss billionaire Hansjorg Wyss.

Voting rights will be divided equally between Clearlake and Mr. Boehly’s group.

Recent days have seen intense speculation that the sale of the club could be jeopardized by uncertainty over the fate of the £1.54billion loan owed by Chelsea parent company Fordstam to Camberley International Investments – a vehicle also associated with the oligarch.

Mr. Abramovich’s advisers at Raine Group advised bidders last week that the loan could no longer be canceled by Mr. Abramovich for legal reasons related to sanctions.

Once an agreement is formally signed with the Clearlake-Boehly group, it will be presented to the government for formal approval in the form of a special license.

As Sky News revealed last week, this process is expected to involve the issuance of a license to approve the deal with a second license required to release the product.

The loan can now be frozen until the government decides to distribute all proceeds from the sale to a new foundation.

Mr Abramovich is reportedly determined to donate at least £2.5billion to a new foundation to benefit victims of war, with last week’s request that the remaining bidders increase their bids by at least 500 million pounds to allow £1 billion to be donated to charity on the day the deal closes.

If Boehly can’t reach a deal, Raine is expected to turn to one of two other bidders: a consortium led by Boston Celtics co-owner Steve Pagliuca and NBA president and Maple Leafs owner Larry Tanenbaum. from Toronto; and one led by Sir Martin Broughton, the former chairman of British Airways and Liverpool FC, which allegedly involved Harris Blitzer Sports & Entertainment – ​​owner of a stake in Premier League side Crystal Palace and a series of American sports teams – holding a majority stake.

Sir Jim Ratcliffe already owns the French football team in Nice
Sir Jim Ratcliffe already owns the French football team in Nice

Clearlake-Boehly’s bid would have offered a total price above the £4.25billion publicly promised by Sir Jim Ratcliffe, the chemicals magnate who tried to block the auction late last week.

Ineos launched a public campaign this week to have its offer considered, but its chances of securing a meaningful commitment are seen as extremely slim, given that it has failed to do its due diligence and is not in the know. familiar with the key details of the sales contract.

Claims by Sir Jim, the founder of Ineos, to be the only British bidder have drawn derision given he left the UK to live in Monaco several years ago.

The last three bidders have all provided detailed plans for their management of the club and the redevelopment of Stamford Bridge, with numerous property advisers engaged to work on the project.

The preferred bidder for Chelsea is advised by Goldman Sachs and Robey Warshaw, where former Chancellor – and Chelsea fan – George Osborne now works as a partner.

Uncertainty over the ownership of the club is already responsible for the departure of key players, including Antonio Rudiger, the German centre-half.

Mr Abramovich has owned Chelsea since 2003 and has made the club one of the best teams in Europe, winning 19 major trophies under his watch.

A spokesperson for the Clearlake-Boehly consortium and Raine both declined to comment.


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