Elliott is new player in AC Milan deal
MILAN: US private equity fund Elliott has rescued former Italian prime minister Silvio Berlusconi’s deal to sell AC Milan, throwing a financing lifeline to Chinese investors who were struggling to complete the transaction.
Berlusconi’s holding company agreed in August to sell the club for €740 million (RM3.5 billion), including €220 million in debt, to a Chinese consortium.
But China’s US$3 billion (RM13 billion) European football spending spree was cut short by a Beijing crackdown on overseas vanity deals and the group failed to raise the funds on time, delaying closure.
Elliott will provide €300 million in financing to the Chinese consortium, a lawyer and a source close to the matter said on Monday, and the deal is now expected to close on April 14 — eight months and two postponements after it was agreed.
AC Milan, seven times European champions but without any major silverware in the past six years, are losing money and need a deep-pocketed investor who can inject funds to buy match-winning players and invest in the brand at home and abroad.
In a wider push to reduce debt, Berlusconi decided to sell the club because he was unwilling to stump up the extra money required for the team to compete with the top European clubs, many now bankrolled by wealthy Gulf and Asian owners.
The Chinese consortium, the members of which have yet to be disclosed, has paid €250 million in four tranches to Berlusconi’s family investment company, Fininvest.
A further €270 million euros is due on April 14, with the rest of the purchase price being paid in the form of assumed debt.
Elliott’s financing deal includes a cash injection into AC Milan itself, as well as help for the consortium to close the deal.
The US fund will provide €180 million to complete the acquisition and another €73 million to help the club to cover short-term payments, said a lawyer working for AC Milan and Yonghong Li, the entrepreneur leading the consortium, confirming earlier reports by daily Corriere della Sera.
An additional €50 million would be invested in the club, bringing Elliott’s total exposure to about €300 million, said a separate source close to the matter.
It was unclear whether the funds would be made available through a loan, equity or both. Reuters