Former Newcastle owner Mike Ashley has bought Coventry City 's home ground, the Coventry Building Society Arena, after the group that holds the lease to the stadium were placed into administration.
Earlier this month, Arena Coventry Limited applied to be placed into administration following the collapse of Wasps Rugby. They have now been brought out of administration by Ashley's Frasers Group, who have completed a £17million purchase of the stadium operators.
Coventry have been able to play at the CBS Arena during the turmoil and recently announced their own takeover. Investment firm Sisu Capital have agreed to sell an 85 per cent stake in the Championship club to local businessman Doug King.
King made a last-minute bid to delay the proceedings that led to Ashley buying the arena. He had submitted his own offer to buy the stadium, for £25m, but that move was unsuccessful.
Despite applying weeks ago, the approval of administrators was only given on Thursday by a specialist judge. Insolvency and Companies Court judge Sebastian Prentis issued the orders at 1.22pm with Rajnesh Mittal and Andrew Sheridan of FRP Advisory Trading Limited appointed as the administrators.
The High Court had been told that upon their appointment, the administrators would seek to “effect a pre-packaged sale of the companies’ business and assets to entities controlled by Frasers Group plc”, with the deal covered by an “exclusivity” agreement.
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Judge Prentis agreed to the deal, which he confirmed had already been signed prior to his administration order. While he respected an "ardour" of King's offer, he insisted that Ashley's bid was the "only" viable way forward.
He said: “It is the bird in the hand, and more than that, it’s the product of many months of trying to find financial support for the group. It’s the only, on this evidence, viable prospect for this group not entering immediate insolvent liquidation."
Ashley will now control ACL, AC06, a wholly owned subsidiary of ACL who hold a 250-year lease of the arena which it subleases to ACL, and IEC, the trading vehicle for conferences, events, retail, car parking and the operation of the Hilton hotel on the site.
ACL was a wholly owned subsidiary of Wasps Holdings Limited, which went into administration last month. The freehold of the CBS Arena is owned by Coventry City Council, with the football club subleasing the stadium from ACL.
If the deal had not gone through, the High Court was told that the stadium operators were facing a financial "black hole" of £465,000 in payments due to be paid by the end of the week, with just £1,200 left in their joint bank accounts.
It marks Ashley's first step back into football since he sold Newcastle last year to Saudi Arabia's Public Investment Fund. He did eye a potential move for Derby County over the summer, but the Rams were instead sold to David Clowes.
