American fund RedBird Capital have overtaken Investcorp in negotiations to buy AC Milan from Elliott Management, according to a report.
Affaritaliani report that RedBird – which already holds a 10% stake in Liverpool and 85% in Toulouse – is very close to buying Milan as they have now taken the lead over Investcorp, with negotiations at ‘an advanced stage’.
The bid from RedBird is €1bn while Investcorp’s is €1.2bn, so why would Elliott prefer the Americans? It is likely because RedBird offered more guarantees, putting the entire ‘cash’ figure on the table, while Investcorp proposed a mix between money and equity with some loans used to finance it.
For this reason Elliott now seem more inclined to accept the offer from RedBird and it would still allow them to make a capital gain of €220m, having invested a total of approximately €780m into the running of the club.
If RedBird win the race it means that their offer is better for the club but also that Investcorp has not offered the necessary guarantees for a strategic investment and not just a financial one.