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AC Milan

Expert explains what it means if Elliott sell Milan to RedBird over Investcorp

The news has emerged over the last few hours that AC Milan are expected to be bought by RedBird Capital and not Investcorp, leaving many wondering what that means.

This morning’s edition of Il Sole 24 Ore (via MilanNews) reported that that Elliott are very likely sell to their compatriots RedBird Capital who have overcome the competition of Investcorp in the last few hours with an offer of €1.3bn, which could rise to €1.8bn.

Meanwhile, Reuters recently stated that the Bahrain-based fund have suspended their plans to buy Milan as per a source close to the negotiation who stated that Investcorp ‘could not agree with them [Elliott] on the resolution of a certain issue’.

Milan fan and financial expert Felice Raimondo has published a thread on Twitter which presents his understanding of the situation and what it means that the club are now set to be bought by RedBird and not Investcorp.

“We will never know why the negotiation with InvestCorp was fell apart, but the disappointment for me lies in the fact that the Arab fund, given the contacts, could have brought related sponsors and therefore quickly increased revenues. Faster and less risky solution from a UEFA standpoint,” he began.

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“Il Sole24Ore speaks of problems for the ‘earn out’ clauses, which is an additional amount to be paid to the seller once certain targets are reached (stadium? sporting results?). In any case, RedBird have consented to these clauses, closing the deal.

“Elliott, a fund that evaluates the best gain for its investors (above all things), according to rumours have ticked off the best conditions. That is, to sell at a high starting figure, remain as a minority shareholder and tomorrow earn even more with the stadium deal.

“That said, we certainly do not end up in bad hands. In fact, RedBird is a fund that specialises in sports and has much more experience in this area than InvestCorp. However, in the absence of related sponsors, the growth of revenues (and of the team) cannot be sudden but gradual.

“This means that Elliott’s work with similar methodologies will continue. Singer, however, will have the advantage getting a return on his investment immediately, if he remains in the minority, he will lose less money in the future (aum. of capital) and will get more when we have the stadium.

“From this point of view, if with InvestCorp – given the proportions, the activities and the contacts of the fund – we could imagine a Milan-only stadium, with RedBird I do not think it will happen. So for me the shared process with Inter will continue, we will see if in San Siro or elsewhere.

“In conclusion, the club will continue to be managed very well, if possible with more competence than before. The hope is to be able to get closer to a reality like that of Liverpool today in a decade.”

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