Biggest ever takeover in Spanish football

It’s been a big few days for Atlético Madrid. Spain’s third-biggest club all but booked a place in the next round of the Champions League after dismantling an abject Tottenham Hotspur on Tuesday night.

A couple of days later, the biggest-ever takeover in Spanish football closed, with Apollo completing its purchase of a majority stake in Atlético at a valuation of somewhere north of €2bn (how far north depends on who you ask). Success in Uefa competitions is one of the reasons the club made an attractive prospect for the US investment group

The deal was a win for Ares Management, which sold down the 34 per cent stake it had acquired for €182mn in 2021. The firm will continue to be involved as a smaller shareholder in the club, and most likely as a lender for the ambitious €800mn real estate project that first sparked Apollo’s interest (and is probably still the key driver of the decision to buy the club itself).

But another big beneficiary was Quantum Pacific, the investment firm of Israeli billionaire Idan Ofer. The fund first bought into Atlético in late 2017, spending about €50mn for a 15 per cent stake. That grew to 32 per cent a few months later after it acquired shares from Chinese property developer Wanda, at a valuation of €333mn.

Quantum sold a sliver of shares — about 3 per cent — to Apollo as part of the takeover, recouping around €75mn in the process. It now owns about 25 per cent of the club.

Making a return of roughly 7x is an impressive outcome for an investment in European football, and is a reminder of why both wealthy individuals and professional money managers continue to show interest in buying into clubs.

But it’s also a reminder that timing is everything. It appears the late 2010s was a good time to get in. At £300mn, the Saudi takeover of Newcastle United in 2021 also looks like a steal.

Some of those buying in at the moment are betting that we will look back ten years from now and say the same thing about the big ticket acquisitions of Atlético, AC Milan, Olympique Lyonnais and Chelsea. Clubs still don’t make profits, so asset appreciation remains the only strategy in town.

But as professional investors know all too well, past performance is not indicative of future results. And hindsight is a wonderful thing.