Investcorp, the fund that has been in talks to purchase AC Milan, remain confident of taking over the Italian giants despite the interest of RedBird Capital Partners, the 11 per cent stakeholders in Liverpool owners Fenway Sports Group.
Last week it was reported by Sky News that RedBird had entered the race to purchase the Serie A giants with a €1bn (£840m) offer lodged with current AC Milan owners Elliott Management. The ECHO had it confirmed over the weekend from sources close to the deal that RedBird were in talks, thought to be at an advanced stage, and that any deal would not impact the long-term plan that RedBird and FSG have following the $750m deal that was struck between the two in March of last year.
RedBird, founded and ran by managing partner Gerry Cardinale, came to the table with an offer after the period of exclusivity ended between Bahraini investment fund Investcorp and Elliott Management, the New York-based fund owned by billionaire Paul Singer that has owned AC Milan since July 2018, when the club's previous owner, Li Yonghong, defaulted on a loan debt that was owed to Elliott Management. That kicked open the door for RedBird to enter the race.
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But reports in Italian sports newspaper Gazzeto Dello Sport have claimed that those close to the Investcorp deal remain bullish over its chances of succeeding, despite the presence of a RedBird investment fund that has been at the vanguard of sports investment over the past two years.
The report states that Investcorp's confidence is two-fold. The fund have offered more to Elliott Management for the purchase, a sum of around €1.18bn (£1bn), although the make up of the deal is different to RedBird's which is 100 per cent equity with no loans or bonds. Investcorp are ready to put in €800m in equity, shared with American fund Ares Capital, while the rest of the money will arrive in the form of a loan, either from a bank, with Goldman Sachs and JP Morgan among those linked, or family wealth from the Persian Gulf.
Investcorp are also emboldened by the fact that they have been in negotiations with Elliott Management for some months and have already completed their due diligence and have been the expectant new owners at the San Siro for some time, with the nature of the time taken to draw up such large and complex agreements claimed to be one of the reasons for the delay.
But RedBird's presence as a challenger to Investcorp provides them with plenty of competition. Like Elliott Management, RedBird are based in New York, their head offices less than a mile from each other. Singer and Cardinale will be familiar with each other from their time on Wall Street, with Cardinale formerly at Goldman Sachs before striking out on his own with RedBird.
There is also the strong track record that RedBird have started to gain within sport. Their investment into FSG has already helped increase the value of the overall operation to $750m investment now worth around $1bn. They have also achieved European football success, their purchase of French side Toulouse two years ago following relegation having been a positive experience, with Les Violets returning to Ligue 1, French football's top tier last month. They have also invested in Indian Premier League cricket team the Rajasthan Royals, have a small shareholding in the Spanish second division side Malaga that could eventually manifest into full ownership and have been the finance behind the project with Hollywood actor Dwayne Johnson to relaunch the XFL in the US to try and fill the American Football void created at the end of the NFL season.
AC Milan currently lead Serie A by two points with two games to play. Any decision on the future ownership of the club will likely happen once the season has concluded, with Singer understood to be keen to avoid unnecessary distractions for Stefano Pioli's team.
