Chelsea sale approved after Abramovich met ‘red line’
Roman Abramovich’s £4.25 billion sale of Chelsea Football Club to a consortium led by American tycoon Todd Boehly is expected to be signed off Monday night by British ministers after weeks intense negotiations to ensure the tycoon does not benefit from this deal.
But British officials say the deal has yet to be green-lit by the European Commission or the Portuguese government: Abramovich is an EU citizen through his Portuguese passport.
UK officials close to the negotiations said the deal still had “major hurdles to overcome”, but Abramovich had hit a “red line” by ministers over the sale and they hopefully it will be passed in London during the night.
The main problem was Britain’s insistence that neither Abramovich, a sanctioned Russian oligarch, nor those connected to him would benefit from the proceeds of the sale.
Abramovich’s advisers and the government have been locked in negotiations for weeks over how to handle the proceeds and the £1.5billion debt Chelsea owes a car overseas linked to the financier. tycoon.
The deal, if finally approved, will signal the end of Abramovich’s two-decade stint running a club he has turned into world-beaters. During his time, the west London club won five Premier League titles and two Uefa Champions League titles.
A British official close to the process said negotiations were now ‘intensified’ between Chelsea, Abramovich, the European Commission and Portugal to push for the deal.
Ongoing work was done late last week, but an official working on the deal said it was like “a death”, with new problems arising just as old ones had been resolved. .
A Whitehall source said: “Everybody wants to close the deal, but given the complex nature of the Chelsea ownership structure, nothing is simple. We’re working hard to assure our international partners who want their own assurances about this deal and – of course – how the proceeds will be spent in the end. any. ”
British officials say times are tight and Chelsea’s future is at risk if the administrative deadlines for the club to attend next season’s Premier League and Uefa Champions League are not met.
Boehly, who owns stakes in the Los Angeles Lakers basketball team and the LA Dodgers baseball team, is leading a takeover backed by California-based investment firm Clearlake Capital, Swiss billionaire Hansjörg Wyss and Guggenheim Partners chief executive Mark Walter. The group still requires final approval from the English Premier League.
Once completed, American investors will control four of the so-called Big Six clubs in the League, the wealthiest domestic league in Europe. Arsenal is owned by Stan Kroenke, the Glazer family controls Manchester United, and John Henry’s Fenway Sports Group owns Liverpool.
Abramovich put Chelsea up for sale just days after Russia invaded Ukraine on February 24. He was later implicated in the failed peace between the two sides.
But the British government sanctioned this tycoon on March 10.
Although assets are technically frozen due to sanctions, Chelsea can still fulfill their fixed commitments and continue operating thanks to a special UK government license that expires on 31st May. 5.
The auction for the club has attracted interest from billionaires, institutional investors and star athletes including racing driver Lewis Hamilton and tennis champion Serena Williams, who support a group led by private equity magnates Josh Harris and David Blitzer, shareholders of Premier League rivals Crystal Palace.
Boehly won with an offer to buy Chelsea for £2.5 billion. He also pledged to invest an additional £1.75 billion in the club’s stadium, facilities and squad in the coming years. His team has agreed to tough restrictions on dividends, management fees and debt, agreements designed to protect the club’s future.
It’s a lucky second for Boehly, the former chairman of chief investment officer Guggenheim Partners, who fell short of Abramovich’s £3 billion asking price in 2019.
US commercial bank Raine Group operated the auction on behalf of Abramovich. US investment bank Goldman Sachs and boutique advisor Robey Warshaw advised Boehly.