Despite the fact we are in the middle of what is a very important January transfer window for Milan, a lot of media attention is being hogged by a possible takeover.
There has been widespread speculation that Bernard Arnault – the owner of the Louis Vuitton group – is interested in purchasing the Rossoneri from American hedge fund Elliott Management.
Newspaper La Repubblica even went big with a report which stated that that Arnault has tabled a €975m bid to buy Milan, and a number of sources have continued to insist that the Frenchman has a genuine interest.
Does this categorically mean that Arnault is not in talks, or that he isn’t keen on buying Milan? We don’t necessarily believe so. Here are two key reasons why the responses from within LVMH may be arriving so quickly…
It is worth noting that if Milan were to be sold to anyone, not just Arnault, then it would be an operation potentially reaching €1billion or more. That is not the kind of amount that lends itself to tomfoolery and pressure tactics in the media.
It is almost a certainty that, if talks were being held, both parties will have signed a Non-Disclosure Agreement (an NDA) which legally obliges all representatives from both sides involved in the deal to not say anything to the media.
It is also in the best interests of the respective parties to adhere to this. If news were to get out and were not to be denied, it could send a message to other buyers – maybe in the Middle East like those who have been linked with Milan before – that the club are up for sale, essentially inviting them to make a rival attempt.
2. The ‘Borsa’
Like bookmakers such Bettingfellow will testify, the betting market is a very volatile place. Various tip offs about player transfers, managerial appointments and other key bits of news can heavily influence odds and how that particular market operates.
Now, imagine that but on a much bigger scale: the stock market. Known in Italian as the ‘Borsa’, the stock exchange is heavily influenced by news that emerges regarding huge multi-national corporations who have their shares listed.
This is no different for both Louis Vuitton Moët Hennessy – who currently trade on Euronext – and for Elliott Management. For both parties, it could be catastrophic if news of an imminent takeover were to get out into the open as it would make their share prices incredibly volatile and unpredictable due to the fact that – as aforementioned – it is potentially a €1billion operation.
There is perhaps a key indication that this is exactly what is going on: the denials have always been swift, thus to minimise the chances of any speculation snowballing and protecting share prices ASAP before any damage is done.
There is no doubt that we haven’t heard the end of the speculation just yet. You can read our latest update on the potential sale courtesy of Vito Angele here.