AC Milan

Private Equity Giant to Buy A Minority Stake in AC Milan

by

May 4, 2015

The weekend’s newspaper reports suggest that Thai businessman, Bee Taechaubol, has agreed to buy a minority stake in AC Milan. The Italian football club is currently under control of Fininvest, the holding group owned by Silvio Berlusconi. It’s yet another private equity backed investment in European football.

A Long Time Target
The football club has been a target for private equity firms for a long time. We reported in February that the Thai investor looked to be the one with the best chance of landing a deal among the interested investors. It now looks like the Thai investor finally got his way. Bee Taechaubol is set to buy a minority stake in the club with the backing of a London-based private equity fund Doyen Sports.

Bloomberg reported on Sunday that the deal is a preliminary agreement, with no indication yet how long it might take to finalise the deal. According to Eurosport, reaching the agreement might take another three to four weeks, but the deal is more than likely to go ahead. Although the final details still need to be figured out, it is thought the seven-time European champion will be listed in Hong Kong, Milan or Shanghai. Even though investors have been eyeing the club in the past, Berlusconi has been adamant in saying the club is not under sale.

A Big Private Equity Investor
Bee Taechaubol is a big name in the investment industry and he has made his name in private equity by investing in listed companies through Thai Prime Company. The company has in the past invested in several sectors including financial services and property. It has also been involved in sports investment in the past.

It is reported that Bee was after a majority stake at one point, but the ex-Prime Minister of Italy wasn’t ready to give up his ownership of the football club. According to an earlier Reuters report, the private equity group director had offered €500 million for a 51% stake in AC Milan.

A Club in Trouble
Although the football club is a big name in the sporting world, its fortunes have not been as good in recent years. It has not been able to gain any silverware since the club won the Italian Serie A title in 2011. The club’s current debt levels have also shadowed its fortunes. It has amassed debts of nearly €250 million and the company made a loss of €91 million in 2014. Yet, its history of success has helped give the club a valuation of $856 million, according to Forbes.

The club was considering a sale a year ago, when it sent marketing documents to some potential buyers, but the intention never went further.

Asian Interest in European Football
Interestingly, Asian private equity investors have been attracted to European clubs in recent months. For example, Manchester City is currently under the control of a consortium led by the Abu Dhabi United Group, with Vichai Srivaddhanaprabha owning Leicester City.

The fortunes in European football are currently enough to attract investment. No doubt, the recent €6.7 billion TV rights agreement in Premier League will help incentivise even more investors towards the football market.

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