RedBird Capital will be the new owners of AC Milan this fall as the closing is scheduled for September. When it was first announced by the club in early June, it seemed far away but the closing is now approaching fast.
Gerry Cardinale, the CEO of RedBird, has already shared his thoughts on the takeover of Milan and the future is looking bright for the club. The project that Elliott Management started, which has brought so much success, will be built on.
There are without a doubt many details to this takeover that could be worth knowing, as highlighted by Gazzetta Dello Sport. The valuation of the club and subsequently the takeover is €1.2bn, part of which will be funded by a vendor loan from Elliott to RedBird at an interest rate of 7%.
Based on the market, it’s a relatively low interest rate and it’s a way for Elliott to keep some control of the club and also for RedBird to delay part of the takeover payment. It’s certainly not an unusual solution and in this case, it’s perfect for both parties.
The vendor loan will be valued at €200-600m, depending on how much Cardinale will be able to raise from investors. It’s possible that it could end up being €600m after all, which would only strengthen the bond between Elliott and RedBird.
As part of the vendor loan, Elliott will also be able to appoint two members to the board of directors and they will most likely be Gordon Singer and Giorgio Furlani, although confirmation is still lacking on that.
Finally, there has been talk of minor shareholder Blue Skye’s anger over the sale to RedBird in recent weeks. However, Elliott are not worried and a company (Arena Investors) which helped Blue Skye raise funds have defended the former. Blue Skye will remain entitled to their 4% share, but it won’t affect the change of ownership.
