Ares Management is backing two bidders in the race to buy Chelsea Football Club from billionaire Roman Abramovich, who brought the team Huge discount after the Russian invasion of Ukraine.
According to people with knowledge of the matter, the investment group, with more than $300 billion in assets under management, is set to take a minority stake in the Premier League team, adding to its substantial portfolio of sporting assets. themselves, according to people familiar with the matter.
Ares has agreed to back bids from private equity moguls Josh Harris and David Blitzer, or from Stephen Pagliuca, co-chair of US private equity firm Bain Capital, and president of the National Basketball Association Larry Tanenbaum, if prevailed, people said.
The two groups are fighting a third shortlisted bid for the club, led by financier Todd Boehly and Santa Monica-based asset manager Clearlake Capital, in an auction led by US commercial bank Raine Group processing.
The acquisition of the club will add to a series of recent sports investments by Los Angeles-based Ares, which have highlighted a desire to provide “patient, long-term capital” to the sector.
As of last summer, the asset manager has committed to invest more than $1 billion including a minority stake in Spanish La Liga champions Atlético Madrid and Formula One’s McLaren Racing. Ares has also given credit to Major League Baseball’s San Diego Padres and National Hockey League’s Ottawa Senators.
Ares declined to comment.
The coronavirus pandemic has spurred institutional investment in sport. Tournaments and teams have been forced to shore up finances after losing billions of dollars in revenue while games were first postponed and then played behind closed doors without fans in attendance. .
Who are Harris and Blitzer? participate in their bid of Formula One driver Lewis Hamilton, tennis champion Serena Williams and City of London athlete Martin Broughton, have lined up three banks to provide loans to bolster their finances.
Bank of America, JPMorgan and Wells Fargo are offering a five-year £500 million term loan for Harris and Blitzer’s bid, approved by Broughton, and an additional 100 million revolving line of credit table, according to bankers with direct knowledge of the matter. The three banks declined to comment.
“The option for a committed credit facility exists only to provide further liquidity to the club,” said tenders spokesman Harris and Blitzer, adding that the sums “purely incremental for all joint venture equity tender proposals” and there are no current plans to withdraw to the base.
The funding package also establishes relationships with three major banks ahead of Chelsea’s planned redevelopment of the home ground, a stadium with a much smaller capacity than its major Premier League rivals.
The spokesman added that Ares’ commitment to Harris’ bid “has no deadlines, no covenants, places no limits on the club and does not pay coupons,” while stressing. that they “will be one of the most diverse ownership groups in the Premier League – representing diverse cultures and backgrounds representing players, Chelsea supporters and the global football community” .
Raine could be the preferred bidder for Chelsea as soon as next week. The transaction requires a green light from the Premier League and special approval from the UK government, said Abramovich, who under UK sanctions, cannot profit from the sale. The Russian billionaire previously pledged to donate the net proceeds to charity.
With its wealth, Chelsea has repeatedly won the highest honors of world football. Under Abramovich, who has owned Chelsea since 2003, the club has won the league five times and won the Uefa Champions League twice, Europe’s most prestigious club competition.
