The
four contenders vying to buy Chelsea will submit final bids on April 11,
paving the way for a prospective new owner to seek government permission to
take over from Roman Abramovich by the end of next month.
Sky News has learnt the remaining contenders have been notified by Raine
Group, the merchant bank handling the Blues' sale, that binding offers must
be made on or around that date - which falls the day before the second leg
of a Champions League quarter-final against Real Madrid.
Bidders - who include several US sports franchise-owning billionaires - will
have the opportunity to improve their offers from the indicative proposals
which saw them make it through to the final stages of one of the most
extraordinary corporate auctions of recent times.
The quartet of contenders had been told by Raine on Saturday they must
commit at least £1bn to future investment in the club if they are to succeed
in the battle to end Abramovich's two-decade tenure.
The additional funding must be made available for the Blues' Stamford Bridge
stadium, playing squad and other areas of development.
Raine's insistence on the pool of capital for investment is likely to go
some way to reassuring supporters its new owner will continue to back it
with the kind of significant financial resource they have become accustomed
to under the Russian-born businessman.
All four of the remaining bidders have significant experience in sports
stadium infrastructure, a key consideration given Chelsea's long-standing
dilemma about the expansion of Stamford Bridge, which has a capacity barely
half that of Manchester United's Old Trafford home.
Between them, the final bidders either control or own stakes in US teams
including the Boston Celtics, the Chicago Cubs, the LA Dodgers, the
Philadelphia 76ers and the Sacramento Kings.
Sir Martin Broughton, the former British Airways and Liverpool FC chairman,
and Lord Coe, the former British Olympian turned sports administrator and
businessman, are fronting a bid that has the financial firepower of Josh
Harris and Dave Blitzer, two wealthy American financiers.
That consortium also includes Vivek Ranadive, an Indian-born entrepreneur,
and a syndicate of other investors from around the world whose identities
are expected to be confirmed in the coming days.
Another of the leading contenders is headed by Todd Boehly, the LA Dodgers
part-owner, and includes Jonathan Goldstein, the London-based property
developer, and Clearlake Capital, a US-based investment firm.
A third group comprises the Ricketts family, which owns the Chicago Cubs,
and the Citadel hedge fund billionaire Ken Griffin, with the US investment
bank Lazard in talks to advise it.
Tom Ricketts, the Cubs chairman, flew to London last week to address
concerns raised by fans' groups about Islamophobic remarks made by his
father, Joe, a decade ago.
People close to the bid have insisted Joe Ricketts has no involvement in it,
and have pointed to the family's successful ownership of the team, having
won the World Series for the first time in a century and completed a $1bn
(£760m) renovation of its home, Wrigley Field - one of the most historic
sports arenas in the US.
The other remaining contender for Chelsea is a bid spearheaded by Stephen
Pagliuca, an American private equity billionaire who owns the Boston Celtics
and Atalanta in Italy's Serie A.
Sky News revealed this weekend a so-called 'blank cheque' vehicle set up by
one of the world's most powerful media tycoons also tabled a proposal to
merge with Chelsea this month.
City sources said Liberty Media Acquisition Corp (LMAC), a New York-listed
special purpose acquisition company - or SPAC - was among the parties which
was eliminated from the auction, largely because of the complexity of
finalising a deal on a timetable which was truncated by Abramovich's
sanctioning.
Mr Malone, who has placed huge bets on sports by engineering the takeovers
of Formula One motor racing and the Atlanta Braves Major League Baseball
team, is said to have lodged a credible offer for Chelsea.
Had it been successful, it would have seen Chelsea join Manchester United as
a US-listed company.
Sources said Raine would assess the four bids against a set of criteria
including the level of equity and debt funding; price; future investment
commitments; speed and certainty of execution; and the claims each party has
to being an appropriate steward of a prestigious sporting brand.
Among the bidders who were eliminated from the process this week were offers
fronted by the London-based property developer and lifelong Chelsea fan Nick
Candy; the former US ambassador to the UK, Woody Johnson; Centricus, an
asset manager; and Saudi Media Group, whose bid is said to have been largely
debt-financed.
Formal deal to approve transaction
expected by the end of next month
Raine is understood to anticipate signing a formal deal and approaching the
government for a special licence to approve the transaction by the end of
next month.
Bidders and bankers have dismissed suggestions some parties had become
frustrated by the pace of the transaction's progress.
By the standards of conventional takeover processes, the Chelsea auction has
moved at breakneck speed, with executives at other major investment banks
suggesting that such a complex sale would typically have taken at least six
months.
Abramovich's sanctioning by the UK Government has added further
complications to the transaction, as bidders have sought clarity on the
legal implications of buying the club.
Sources also pointed out further bidders had continued to emerge even in the
last week, requiring Raine to evaluate their seriousness.
Some fan groups have questioned the absence of a wealthy British businessman
from the process, although Sir Jim Ratcliffe, the Ineos tycoon who is now
based in Monaco, did express an interest before deciding not to lodge a
formal offer, according to insiders.
A number of the remaining bidders are expected to make further refinements
to the composition of their bids in the next fortnight.
The auction of Chelsea has become the most hotly contested - and potentially
the richest - sale of a leading sports franchise in history, with hundreds
of parties expressing an initial interest in buying a share of the club or
controlling it outright.
The cluster of American sports billionaires circling Chelsea underlines the
extent to which the English Premier League has become a magnet for
financiers from across the Atlantic, with Arsenal, Liverpool and Manchester
United all having been acquired by US-based businessmen.
Prior to being sanctioned, Abramovich had said he intended to write off a
£1.5bn loan to the club and hand the net proceeds from the sale to a new
charity he would set up to benefit the victims of the war in Ukraine.
Last week, the government agreed to further amend the licence allowing
Chelsea to continue operating, with the club now able to resume selling
tickets for away matches.
The proceeds are to be retained by the Premier League and earmarked for a
Ukrainian war victims charity.
Chelsea can also now receive £30m from the club's parent company to ease
cashflow constraints caused by the current crisis.
Rapid sale essential if Chelsea is to
avert uncertainty
A rapid sale is seen as essential if Chelsea is to avert the uncertainty
that would trigger the break-up of one of the top flight's most valuable
playing squads.
The current FIFA Club World Cup winners have been thrown into disarray by
Russia's war on Ukraine, with Abramovich initially proposing to place the
club in the care of its foundation and then formally putting it up for sale.
Abramovich had initially slapped a £3bn price tag on the club, with the net
proceeds being donated to a charitable foundation set up to benefit the
victims of the war in Ukraine.
As well as government consent in the form of a special licence, Chelsea's
new owners will also require the approval of the Premier League under its
fit and proper ownership test.
Raine has dismissed a report suggesting it was in line to be paid a fee
worth 1.5 per cent of the transaction value, which would have been
equivalent to £45m if Chelsea is sold for £3bn.
Bidders are said to have been informed Raine's fee is substantially lower
than that, and is partly contingent upon both the scale of the ensuing
proceeds to charity, and the level of guaranteed future investment in
Chelsea.
Raine declined to comment on any other aspect of the bidding process besides
disputing the report of its fee, while spokespeople for the consortia all
refused to comment.
top