Skip to main content

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.

 

Labels:

Comments

Post a Comment

Popular posts from this blog

Fulham requires big funding from owner

After lengthy delays, Fulham’s shiny, new Riverside Stand has finally opened, creating “a unique Thameside destination with first class facilities for supporters and partners on match days, as well as for the wider community year-round”. This ambitious project has increased Craven Cottage’s capacity by around 4,000 to 29,600, while it has also taken advantage of the club’s fantastic location and wealthy catchment area by including two Michelin star restaurants, a rooftop swimming pool, corporate hospitality and event space, all benefiting from views of the Thames. Chief executive Alistair Mackintosh observed, “Fulham is the sort of club that can have a business class or first class and have fans that turn left on a plane.” Indeed, there is also an exclusive members club – with a football season ticket as an optional extra. It’s fair to say that “the times they are a-changing”, as this is a long way from the traditional pie and a pint. However, in a world where clubs face the tw...
Post a Comment
Read more

It's no deal say Spurs insiders over Taiwanese takeover

Senior figures at Tottenham Hotspur insisted on Friday that they had not been informed of any deal to sell Daniel Levy’s stake in the club. A business group, Eight Sports Capital — which is said to include a billionaire Taiwanese financier — claimed that it had an agreement in place to buy a 24.99 per cent stake in ENIC, the club’s majority owners, from Levy, who owns 29.88 per cent. The Times has been told Ng Wing Fai and Brooklyn Earick form part of the group, having both been linked previously to potential takeovers of the Premier League club. The Taiwanese businessman, Richard Tsai, is also said to be part of the consortium. He is reportedly worth £7 billion.  Last year Earick, the former DJ and tech entrepreneur, was part of an attempted £4.5 billion takeover, which was “unequivocally rejected” by Spurs.  An ENIC spokesperson said: “We can confirm that neither ENIC nor THFC are aware of any sale by Daniel Levy’s Family Trust of its minority stake in ENIC, THFC’...
Post a Comment
Read more

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...
1 comment
Read more