Why did Ratcliffe Chelsea bid fail and what now?

It’s not every day that investment bankers give the “cold shoulder” to one of the world’s richest men.  But merchant bank Raine Group refused to entertain a last-gasp offer for Chelsea from Jim Ratcliffe, founder of petrochemicals company Ineos, who has lined up £4.25bn to acquire and fund the football club.

Instead, Raine has gone with US financier Todd Boehly and investment firm Clearlake Capital, backed by Swiss billionaire Hansjörg Wyss.

So why did Ineos’s “British bid, for a British club” fail to make the grade?  For starters, Ratcliffe was late to the party. Too late, it would appear, having dodged the formal process that opened when oligarch Roman Abramovich confirmed he was selling the west London club soon after Russia invaded Ukraine.

It doesn’t help that Ineos has a history of questioning if Chelsea is worth the money, baulking at an asking price of more than £2bn in 2018 when Abramovich ultimately opted against selling. Ratcliffe also turned down the opportunity to bid ahead of earlier deadlines in this year’s auction.

Ineos director Tom Crotty told the Financial Times  ‘Scoreboard’  that the group’s sense of the price range was “a lot more sensible” than expected. He also pointed to increases in the value of the English Premier League’s international broadcast deals, which are expected to generate more than £10bn over the next three seasons.

“The numbers make sense,” he says. “We put the bid in and that’s it really, I suppose you can say we’ve had the cold shoulder.”

But the crux of it really comes down to leverage. Raine took three sets of deep-pocketed investors to the final stage of the auction, with two ready to step up in the event that Boehly’s group withdrew.

Allowing Ineos to crash the party risked driving the shortlisted bidders away. That’s far from ideal given that negotiations with Ratcliffe were not guaranteed to result in a deal.

Still, Ineos isn’t minded to go away and keeps waving the Union Jack.  “We don’t tend to give up on things too easily,” said Crotty. “Until this is a finished deal we’ll probably keep reminding people we’re offering an option.”

Could Ratcliffe return to his interest in the club he supported in his youth, Manchester United?   His explanation is that the club is not for sale.   However, if he put £4.25 billion on the deal might the Glazers be interested, particularly given the need to spend money on updating the stadium and the training ground, as well as on the squad?  

Replacing an American franchise operation by 'British' ownership at a top club would be great PR.  It is also generally felt that top British clubs are under valued given the ability to make more from the matchday 'experience', branding and streaming rights.  Watch this space.