Investcorp, the fund which has been in talks to buy AC Milan, remains confident in taking over the Italian giant despite interest from RedBird Capital Partners, the 11% shareholders of Liverpool owner Fenway Sports Group.
Last week it was reported by Sky News that RedBird was in a bid of 1bn. The ECHO had sources close to the deal confirm over the weekend that RedBird was in talks, which are believed to be at an advanced stage, and that a deal would not affect the long-term plan RedBird and FSG have following the $750 million deal that was struck between the two in March last year.
RedBird, founded and led by managing partner Gerry Cardinale, came to the table with an offer after a period of exclusivity between Bahraini mutual fund Investcorp and Elliott Management, the New York-based fund of billionaire Paul Singer, which has since owned AC Milan , expired in July 2018 when the club’s previous owner, Li Yonghong, defaulted on a loan debt to Elliott Management. That opened the door for RedBird to race.
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But reports in Italian sports newspaper Gazzeto Dello Sport have claimed that those close to the Investcorp deal remain optimistic about its chances of success, despite the presence of a RedBird mutual fund, which has been at the forefront of sports investments for the past two years .
The report states that Investcorp’s confidence is twofold. The fund has offered Elliott Management more for the purchase, a sum of around €1.18bn (£1bn), although the deal differs from RedBird’s, which is 100 per cent equity with no loans or bonds. Investcorp is ready to invest 800 million euros in equity, which will be shared with the American fund Ares Capital, while the rest of the money will come in the form of a loan either from a bank, with Goldman Sachs and JP Morgan among its allies, or from the family comes wealth from the Persian Gulf.
Investcorp is also encouraged by the fact that they have been in negotiations with Elliott Management for a number of months and have already completed their due diligence and have been the prospective new owners of the San Siro for some time as far as the duration of the draw is concerned extensive and complex agreements were one of the reasons for the delay.
But RedBird’s presence as a challenger to Investcorp gives them plenty of competition. Like Elliott Management, RedBird is based in New York, with their main offices less than a mile apart. Singer and Cardinale will know each other from their Wall Street days, with Cardinale formerly at Goldman Sachs before starting his own business with RedBird.
There’s also the strong track record that RedBird has built in esports. Their investment in FSG has already helped increase the value of the overall operation to a $750 million investment, which is now valued at approximately $1 billion. They have also found success in European football. Buying French club Toulouse two years ago after relegation was a positive experience and Les Violets returned to Ligue 1, France’s top flight, last month. They have also invested in Indian Premier League cricket team the Rajasthan Royals, have a small stake in Spanish second division club Malaga which could eventually manifest into full ownership and were the funding behind the project with Hollywood actor Dwayne Johnson to restart the XFL in USA to try to fill the void in American football left at the end of the NFL season.
AC Milan currently lead Serie A by two points with two games remaining. Any decision on the future ownership of the club is likely to be made once the season is over, with Singer keen to avoid unnecessary distractions for Stefano Pioli’s team.