Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Chelsea FC sale: Dividend ban and debt limits feature in 'anti-Glazer' takeover deal

Chelsea FC sale: Dividend ban and debt limits feature in 'anti-Glazer' takeover deal

Clauses preventing Chelsea's new owners paying dividends or management fees until 2032 are being discussed as a consortium spearheaded by Todd Boehly tries to finalise a binding £4bn takeover.

The new owners of Chelsea Football Club would be prevented from paying dividends or taking management fees for a decade under a package of measures designed to avoid the controversies which have dogged 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 spearheaded by the American financier Todd Boehly is in discussions about an unprecedented series of conditions as part of its £4bn takeover of the Blues.

Sources close to the bid said on Friday that the Clearlake-Boehly group was in advanced negotiations with Chelsea's advisers about measures that would include: barring them from paying dividends or management fees until 2032; prohibiting the sale of any shares in the club for 10 years; and agreeing to strict limits on the level of debt that they could take on.

In line with the other final bidders for last season's Champions League winners, it has also committed minimum further investment of £1bn in its stadium, academy and women's team.

The demands from Raine 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.

One insider dubbed the measures "anti-Glazer clauses" that were designed to ensure Chelsea's financial stability in the post-Roman Abramovich era.

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

Further details of the conditions attached to the agreement were unclear, although a source said the limitations on debt would see the club able to borrow "several hundred million pounds" for working capital.

The roughly-£2.5bn purchase price for the club would be funded entirely in equity, the source added.

The Glazer family's £790m takeover of Manchester United saddled the club with expensive debt known as payment-in-kind notes, and provided a focal point for fan protests, which escalated in the wake of Sir Alex Ferguson's retirement in 2013.

Manchester United was floated on the New York Stock Exchange a decade ago, with the Glazers having extracted hundreds of millions of pounds in dividends and from the sale of shares during their ownership.

Joel Glazer (right) and Avram Glazer (left)


The series of provisions would, if agreed, represent a bold bet from Chelsea's new owners - particularly given that Clearlake has a financial imperative to deliver returns to its investors.

On Thursday, Mr Abramovich issued a statement rebutting reports that he was seeking the repayment of a £1.5bn loan to the club.

He also said he had not "increased the price of the club [at the] last minute", despite all three of the shortlisted bidders having been told of a demand for an additional £500m during meetings last week.

"Following sanctions and other restrictions imposed on Mr Abramovich by the UK since announcing that the club would be sold, the loan has also become subject to EU sanctions, requiring additional approvals," a spokesman for Mr Abramovich said.

"That means that the funds will be frozen and subject to a legal procedure governed by authorities. These funds are still earmarked for the Foundation. The government are aware of these restrictions as well as the legal implications."

Sky News revealed earlier this week that Clearlake would hold about 60% of Chelsea's shares under a restructured deal with Mr Boehly, the LA Dodgers part-owner, and his fellow investors, who include the Swiss billionaire Hansjorg Wyss.

Voting rights will be split equally between Clearlake and Mr Boehly's group.

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

Mr Abramovich's advisers at Raine Group informed bidders last week that the loan could no longer be written off by Mr Abramovich for legal reasons associated with the sanctions.

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

As Sky News disclosed last week, that process is expected to involve one licence being issued to approve the deal with a second licence required to release the proceeds.

The loan may now be frozen until the government decides to distribute the full sale proceeds to a new foundation.

Mr Abramovich is said to be determined to donate at least £2.5bn to a new foundation benefiting war victims, with last week's demand that the remaining bidders increase their offers by at least £500m made to enable £1bn to be handed to charity on the day the deal completes.

If Mr Boehly cannot finalise a deal, Raine is expected to turn to one of the two other bidders: a consortium headed by Boston Celtics part-owner Steve Pagliuca and Larry Tanenbaum, the NBA chairman and Toronto Maple Leafs owner; and one led by Sir Martin Broughton, the former British Airways and Liverpool FC chairman, which would have involved Harris Blitzer Sports & Entertainment - owner of a stake in Premier League side Crystal Palace and a string of US sports teams - holding a controlling interest.

Sir Jim Ratcliffe already owns French football team Nice


The Clearlake-Boehly bid is understood to have offered a total price higher than the £4.25bn publicly pledged by Sir Jim Ratcliffe, the chemicals tycoon who tried to gatecrash the auction late last week.

Ineos has mounted a public campaign this week to have its bid considered, but its chances of securing meaningful engagement are regarded as extremely slim, given that it has not undertaken due diligence and is unaware of key details of the sale contract.

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

The three final bidders all provided extensive plans for their management of the club and the redevelopment of Stamford Bridge, with numerous real estate advisors engaged to work on the project.

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

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

Mr Abramovich has owned Chelsea since 2003, and has turned the club into one of the top sides in Europe, with 19 major trophies having been won under him.

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

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
Tulsi Gabbard Unveils Evidence Alleging Political Manipulation of Intelligence During Trump Administration
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Trump Announces Coca-Cola to Shift to Cane Sugar in U.S. Production
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Air India Pilot’s Mental Health Records Under Scrutiny
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
Moonshot AI Unveils Kimi K2: A New Open-Source AI Model
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
EU Delays Retaliatory Tariffs Amid New U.S. Threats on Imports
Trump Proposes Supplying Arms to Ukraine Through NATO Allies
US Opens First Rare Earth Mine in Over 70 Years in Wyoming
Bitcoin Reaches New Milestone of $116,000
Severe Heatwave Claims 2,300 Lives Across Europe
Declining Beer Consumption Signals Cultural Shift in Germany
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Massive Anti-Government Protests Erupt in Belgrade
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Hungary's Prime Minister Criticizes NATO's Role in Ukraine
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Hungarian Scientist to Conduct 30 Research Experiments on the International Space Station
×