Sole 24 Ore: Two big groups interested in buying AC Milan – the full situation

Image: Quartz

The current situation at AC Milan could present the perfect opportunity for an interested party to buy the club from Elliott Management, a report claims.

According to il Solo 24 Ore, the team’s performances on the field – particularly the 5-0 defeat against Atalanta – could mean that Elliott lower their claims and get rid of an “asset” that is becoming a burden. 

However, the American hedge fund is not used to recording capital losses and will not sell for a loss, but the struggles at the moment means that an astronomical fee cannot be demanded.

As of the end of September, the Singer family – in addition to the €300m loaned to Yonghong Li and collected by Fininvest at the time of the sale of the club – invested another €325m into Milan.

However, the Rossoneri currently make a loss of about €10m per months and as a result they may need to invest at least another €60m by June 30.

In order not to lose money, the American fund should therefore sell Milan for over €700m, and that is without considering a net financial debt of €83m (as of 30 June 2019) and a negative transfer market balance of €75m. Including these debts, the valuation rises to €850-900m.

The stadium project could play a big role. It may act as a driving force for the sale: if the definitive yes come from the City Council soon then a new owner could be in place by next season. If they delays continue, it is likely to muddy the waters.

At the moment, two large foreign groups have started more serious discussions with Milan, plus one Italian group: LVMH Moët Hennessy Louis Vuitton; Hines Interests Limited Partnership and Prelios.

The Arnault family

The Arnault family have been persistently linked with an attempt to buy Milan in recent months, with copious denials arriving from Paris. 

The report claims that Elliott presented the Arnault family with ‘the possibility of creating a futuristic entertainment, sports and fashion district in San Siro’, modelled on the Staples Center in Los Angeles.

However, Milan’s current owners are asking for €1.2bn to buy the club, which is much higher than the the €900-950m offered by Arnault.

In addition, it must also be considered that the total investment needed by Arnault could be around €2billion, when factoring the €600m which would go towards the stadium plus the €500m estimated to be needed over the next two to three years to get Milan back to the Champions League.

Hines and the new San Siro

Hines are one of the largest real estate companies in the world, with offices in 24 countries, and assets valued at an estimated value of $26bn USD.

Since 2015 the group has invested €1.8bn in Milano and plans to invest another €3bn by 2023, as stated by the Italian CEO Mario Abbadessa, half of which to be collected among Asian investors,

Hines are currently working to intersect in one way or another the plans of Milan and Inter, as they are looking at sites where the new stadium has been proposed to be built if the new San Siro project does not work out.