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Controversial businessman swoops for Hertha Berlin

Takeovers, even partial ones, are relatively rare in the Bundesliga. Hence, it is a significant development when a controversial businessman buys a minority stake in Hertha Berlin. Lars Windhorst has splashed out €125m on a 37.5 per cent stake in the heavily indebted (€119.6m) and loss-making club. He has an option to acquire a further 12.4 per cent in the future at a higher valuation through his investment vehicle Tennor Holding which would give him effective control.

Mr Windhorst has a history of legal troubles. He is at the centre of a controversy over illiquid and high-risk corporate bonds held by H2O Asset Management’s funds, a subsidiary of French bank Natixis. The funds suffered outflows of more than €5bn since the Financial Times reported on the exposure last week.

However, his spokesman has specifically denied that it is a trophy purchase saying it would be too expensive for that. He thinks there is real potential in a club located in Germany's capital city. In particular, it is hoped to develop an enhanced digital strategy.

The deal values 100 per cent of Hertha’s equity at €333m — a 70 per cent premium on the price the club paid to private equity fund KKR seven months ago, when Hertha bought back the US fund’s 36.3 per cent stake for €71.2m.

Hertha finished 11th in the Bundesliga in the 2018-19 season, one place below the previous season, when it also played internationally in the Europa League. It has been relegated to the second division twice this decade.The club’s revenues rose 23 per cent in the 2017-18 season to €129.6m. While net losses narrowed by a third to €4.1m. The previous year marked the fourth consecutive loss-making season, with cumulative losses since the 2014/15 season adding up to €24m.

The club currently plays at the Olympic Stadium, but hopes to construct its own stadium when its lease runs out in 2025. The Olympic Stadium is simply too big for its purposes, rarely being more than two-thirds full for a home game which is well below the Bundesliga average of 92 per cent. The club has faced a number of financial crises in its history: Hertha Berlin

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