More details are emerging over the €1.2bn takeover of AC Milan by RedBird, including a loan from Elliott Management, while Forbes call this a ‘better bargain’ than the purchase of Chelsea.
The Rossoneri completed the paperwork this week and the closing is expected no later than September 2022, but effectively Milan are already under the ownership of American fund RedBird.
Elliott remain as minority shareholders and there had been reports in the Italian media they were loaning money to RedBird for the sale at an astronomical interest rate of 15 per cent.
Calcio e Finanza have gone over the paperwork and insist although there is indeed a vendor loan involved for €200-300m, it is not an unusual process and the interest rate is 6 per cent.
This is a form of delayed payment, so allows RedBird to spread the cost of the operation out.
Because of this, RedBird did not need to receive any financing from banks, having used JP Morgan and Bank of America Merill Lynch only as advisors.
It is also reported that Elliott would receive a bonus if RedBird were to sell Milan on at a higher price than they paid for it.
Meanwhile, US financial expert site Forbes maintains in its analysis that “the pending sale of AC Milan is a better bargain than the recent purchase of Chelsea FC.”
Roman Abramovich sold the Premier League club to Todd Boehly and Clearlake Capital for $3.1bn.
The article points out that while Chelsea is more profitable than AC Milan currently, the club was also financed for years by Abramovich, whereas the Rossoneri have become self-financing under Elliott and balanced the books, so are free of debt.
RedBird also have a history of increasing value of football clubs, having purchased Toulouse FC in France two years ago for $20m, a side now estimated to be worth $80m after back-to-back promotions.
“In the long term, AC Milan and Chelsea will both appreciate in value. But the Italian club will likely do so much more quickly than the English one.”
Milan, l’affare Elliott-RedBird tra vendor loan e rivendita: Calcio e Finanza è in grado di svelare tutti i dettagli tra cifre e tasso di interesse https://t.co/PbvwEN5E8w pic.twitter.com/gqag9xONeX
— Calcio e Finanza (@CalcioFinanza) June 2, 2022