CF: Loans and clauses – the details of the deal between Elliott Management and RedBird

By Oliver Fisher -

AC Milan will soon formally change owners again from Elliott Management to RedBird Capital in a deal worth €1.2billion that is expected to be fully completed in September 2022.

According to what is being reported by Calcio e Finanza, Gerry Cardinale’s RedBird will not receive funding from banks to complete the acquisition as JP Morgan – together with Bank of America Merrill Lynch – acted only as Elliott’s advisor for the transaction.

Instead, there will be a vendor loan (a loan granted by the seller to the buyer), so in this case from Elliott to RedBird. This is a not uncommon practice in the world of finance and in the specific case, the funding should be between €200-300m. In essence, it functions more than anything as a form of delayed payment granted by Elliott regarding a part of the agreed amount for the purchase of the club.

Another important detail is also the interest rate at which this vendor loan will be granted which should be around 6-7% and not the 15% mentioned by some sources. When looking at Inter for example, their bonds are now trading at a rate of around 9%.

There will also be a sort of bonus for Elliott (less than 6%) in the event that RedBird were to resell Milan at a higher price than what the club was bought for. It is a a percentage on the resale that Elliott will then be able to collect but only in the event that the new sale price is above €1.2bn.

Tags AC Milan
Serie A Standings

Live football scores . Current table, fixtures & results.