• Tuesday, June 18, 2024
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BusinessDay

Arsenal fans say take over of club is end of dream

Arsenal football club fans say Tuesday’s take over of the football club by leading shareholder Stan Kroenke marks the end of hope for the exciting club.

“This news marks a dreadful day for Arsenal football club,” Arsenal Supporters Trust said in a statement following the announcement. “Stan Kroenke taking the club private will see the end of supporters owning shares in Arsenal and their role upholding custodianship values.”

Kroenke, the US sports mogul who owns a controlling stake in Arsenal, has struck a deal to buy Russian metals magnate Alisher Usmanov’s 30 per cent stake in the London-based football club for £550m in cash, giving him sole ownership and bringing an end to a battle between the two high-profile billionaires.

The English Premier League club’s two largest shareholders had tussled for control of Arsenal and its direction for years, with both seeking to buy out the other. Last month, the Financial Times reported that Mr Usmanov had in effect conceded defeat after recognising Mr Kroenke would never sell control to him.

The sale, which values the shares in the club at £1.8bn, marks only a small step-up in value from the offer rejected by Mr Usmanov in October. Then, when offered £525m for his shareholding, Mr Usmanov said: “I have always been and will continue to be an ardent supporter of Arsenal and I see my 30 per cent stake as an important aspect in protecting the best interests of the fans in the club.”

Last year, Mr Usmanov offered $1.3bn to acquire the 67 per cent of shares held by Mr Kroenke, but the offer was rejected. Frustrated with the club’s performance and a lack of spending for players, Arsenal fans cheered during one match for Mr Kroenke to sell his stake.

Despite his 30 per cent holding, Mr Usmanov has never had a board seat or any say in the way Arsenal is run, complicating a sale of his holding to any interested party other than Mr Kroenke.

On Tuesday, Mr Kroenke said he appreciated Mr Usmanov’s “dedication to the Arsenal Football Club and the storied ethos and history the club represents”.

His investment vehicle, KSE UK, said in a statement that the takeover would “result in the opening of a new chapter in the history of the club in bringing 100 per cent private ownership by KSE”.

The offer values each Arsenal share at £29,419. The deal is being funded by a £557m loan from Deutsche Bank, and just over £45m in cash from Mr Kroenke’s own resources.

Mr Kroenke, who also owns the LA Rams American football franchise and the Denver Nuggets basketball team, has been a divisive figure among Arsenal fans, with some blaming the club’s waning fortunes — Arsenal last won the Premier League in 2004 — on his management.

Arsenal’s thinly traded shares, which are quoted on London’s NEX exchange, will be delisted as a result of the deal.

The change in ownership comes as the club embarks on a new era on the pitch. Spaniard Unai Emery will take charge of the side for his first Premier League match on Sunday, after replacing Arsène Wenger, the French coach who managed Arsenal for 22 years.

The deal draws a line under a battle for control of Arsenal that has stretched back more than a decade. Mr Usmanov first took a 14.6 per cent stake in Arsenal in 2007 for £75m, in partnership with Anglo-Iranian businessman Farhad Moshiri, now owner of rival Everton.

Mr Kroenke also bought in that year with a 10 per cent stake purchased from ITV at a valuation of about £300m.

In 2011, he took control of Arsenal after buying out a number of significant shareholders, including diamond dealer and life-long fan Danny Fiszman, who died three days later, at a price of £11,750 a share, valuing Arsenal’s share capital at £731m.

Kroenke, 71, also owns professional hockey, football and lacrosse teams all based in Colorado. His business interests span significant real estate holdings in the US, Canada and the UK as well as a vineyard and estate in France.