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.

Newsletter

Related Articles

0:00
0:00
Close
Unelected PM of the UK holds an emergency meeting because a candidate got voted in… which he says is a threat to democracy…
Farmers break through police barriers in Brussels.
Ukraine Arrests Father-Son Duo In Lockbit Cybercrime Bust
US Offers $15 Million For Info On Leaders Of Cybercrime Group Lockbit
Apple warns against drying iPhones with rice
Alexei Navalny: UK sanctions Russian prison chiefs after activist's death
German economy is in 'troubled waters' - ministry
In a recent High Court hearing, the U.S. argued that Julian Assange endangered lives by releasing classified information.
Tucker Carlson says Boris Johnson wants "a million dollars, in Bitcoin or cash, from Tucker Carlson to talk about Ukraine.
Russia is rebuilding capacity to destabilize European countries, new UK report warns
EU Commission wants anti-drone defenses at Brussels HQ
Von der Leyen’s 2nd-term pitch: More military might, less climate talk
EU Investigates TikTok for Child Safety Concerns
EU Launches Probe Into TikTok Over Child Protection Under Digital Content Law
EU and UK Announce Joint Effort on Migration
Ministers Confirm Proposal to Prohibit Mobile Phone Usage in English Schools
Avdiivka - Symbol Of Ukrainian Resistance Now In Control Of Russian Troops
"Historic Step": Zelensky Signs Security Pact With Germany
"Historic Step": Zelensky Signs Security Pact With Germany
Russian opposition leader Alexey Navalny has died at the Arctic prison colony
Tucker Carlson grocery shopping in Russia. This is so interesting.
France and Germany Struggle to Align on European Defense Strategy
‘A lot higher than we expected’: Russian arms production worries Europe’s war planners
Greece Legalizes Same-Sex Marriage and Adoption Rights
Russia "Very Close" To Creating Cancer Vaccines, Says Vladimir Putin
Hungarian Foreign Minister: Europeans will lose Europe, the Union's policy must change drastically
Microsoft says it caught hackers from China, Russia and Iran using its AI tools
US Rejects Putin's Ceasefire Offer in Ukraine
The Dangers of Wildfire Smoke and Self-Protection Strategies
A Londoner has been arrested for expressing his Christian beliefs.
Chinese Women Favor AI Boyfriends Over Humans
Greece must address role in migrant vessel disaster that killed 600: Amnesty
Google pledges 25 million euros to boost AI skills in Europe
Hungarian President Katalin Novák Steps Down Amid Pardon Controversy
Activist crashes Hillary Clinton's speech, calls her a 'war criminal.'
In El Salvador, the 'Trump of Latin America' stuns the world with a speech slamming woke policing after winning a landslide election
Trudeau reacts to Putin's mention of Canadian Parliament applauding a former Ukrainian Nazi in his interview with Tucker Carlson.
The Spanish police blocked the farmers protest. So the farmers went out and moved the police car out of the way.
Volodymyr Zelenskiy fires top Ukraine army commander
Tucker Carlson's interview with Vladimir Putin raises EU concerns
Finnish Airline, Finnair, is voluntarily weighing passengers to better estimate flight cargo weight
Russia's Economy Expands by 3.6% Due to Increased Military Spending
Ukraine MPs Vote To Permit Use Of Dead Soldiers' Sperm
German Princess Becomes First Aristocrat To Pose Naked On Playboy Cover
UK’s King Charles III diagnosed with cancer
EU's Ursula von der Leyen Confronts Farmer Protests Amid Land Policy Debates
Distinguishing Between Harmful AI Media and Positive AI-Generated Content: A Crucial Challenge for the EU
Tucker Carlson explains why he interviewed Putin
Dutch farmers are still protesting in the Netherlands against the government, following the World Economic Forum's call for 'owning nothing.'
Hungarian Prime Minister Viktor Orbán stands up for European farmers and says, 'Brussels is suffocating European farmers.
×