Chelsea FC sale: Clearlake stake in Blues to be reduced in restructured deal


The American private equity firm financing the preferred bid to buy Chelsea Football Club will take a reduced stake in the Blues under a restructured deal that it wants to finalise within days.

Sky News has learnt that Clearlake Capital is expected to own approximately 60% of Chelsea’s shares if the consortium spearheaded by Todd Boehly, the LA Dodgers part-owner, can strike a definitive agreement with Roman Abramovich and his advisers.

California-based Clearlake had been expected to own 66% of the Stamford Bridge club, with voting rights split equally between it and Mr Boehly’s group.

However, the demand for an extra £500m from Mr Abramovich – made just days before Mr Boehly was selected as the preferred bidder for Chelsea – will see the American and his individual co-investors injecting a majority of the additional money themselves, according to one insider.

Sources said that details were still being worked through, but that the restructured ownership agreement was likely to mean that Clearlake owned 60% of Chelsea, with Mr Boehly and others holding the remaining 40% of the equity.

News of the revised deal comes amid speculation that the club’s sale could be jeopardised by uncertainty over the fate of a £1.54bn loan owed by the club’s parent company, Fordstam, to Camberley International Investments – a vehicle also associated with the oligarch.

Sky News revealed last Thursday that Mr Abramovich’s advisers at Raine had informed bidders that the loan would no longer be written off by Mr Abramovich for legal reasons associated with the sanctions.

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However, the government is seen as being unlikely to issue the licence required to implement the sale unless the loan is dissolved, causing renewed anxiety about Chelsea’s ability to operate beyond the expiry of its current licence at the end of May.

Clearlake is pressing ahead despite the confusion by aiming to secure rapid approval from the Premier League, having given assurances about the identities of its underlying investors.

The Clearlake-Boehly bid is understood to have offered a total price higher than the £4.25bn publicly pledged by Sir Jim Ratcliffe, the chemicals tycoon who tried to gatecrash the auction late last week.

A director at Ineos, Sir Jim’s chemicals group, told Bloomberg News on Wednesday that its offer had been “rejected out of hand by Raine [the merchant bank handling the sale] but we will keep reminding people we are still here”.

Its chances of securing meaningful engagement are, however, regarded as extremely slim, with two other bidders regarded as more likely substitutes for the Clearlake-funded offer if it cannot sign a deal by the end of this week.

Ineos has done none of the due diligence or contractual work undertaken by the other three bidders during a frenzied two-month period, while Sir Jim’s claim to be the only British bidder has attracted derision given that he left the UK to live in Monaco several years ago.

The three final bidders all provided extensive plans for their management of the club and the redevelopment of Stamford Bridge, with numerous real estate advisors engaged to work on the project.

The preferred bidder for Chelsea is being advised by Goldman Sachs and Robey Warshaw, where the former chancellor – and Chelsea fan – George Osborne, now works as a partner.

Sky News revealed at the weekend that two separate licences are likely to be issued by the government if the issues relating to the loan can be resolved: one to implement the transaction itself, and the other to release the proceeds of the sale.

Mr Abramovich is said to be determined to donate at least £2.5bn to a new foundation benefiting war victims, with last week’s demand that the remaining bidders increase their offers by at least £500m made to enable £1bn to be handed to charity on the day the deal completes.

Uncertainty over the club’s ownership already being blamed for the departure of key players including Antonio Rudiger, the German centre-half.

By clinching preferred bidder status, the Boehly-Clearlake group has committed not to sell a controlling stake in Chelsea for at least a decade.

That guarantee, which is thought to be unprecedented in a football club auction, has been allied with one for minimum further investment of £1bn in its stadium, academy and women’s team.

The demands from Raine highlight the unusual nature of the Chelsea sale process at a time when the ownership of English football clubs faces unprecedented scrutiny and government intervention.

Mr Abramovich has owned Chelsea since 2003, and has turned the club into one of the top sides in Europe, with 19 major trophies having been won under him.

The two defeated consortia were headed by Boston Celtics part-owner Steve Pagliuca and Larry Tanenbaum, the NBA chairman and Toronto Maple Leafs owner; and Sir Martin Broughton, the former British Airways and Liverpool FC chairman, which would have involved Harris Blitzer Sports & Entertainment – owner of a stake in Premier League side Crystal Palace and a string of US sports teams – holding a controlling interest.

A spokesman for the Clearlake-Boehly consortium and Raine both declined to comment.

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