Einhorn Could Buy Mets for USD1 in 3 Years Time
June 16, 2011
Forbes have reported that hedge fund manager David Einhorn could gain control of Major League Baseball’s (MLB) New York Mets for just US$1 in three years time.
A deal was agreed between Einhorn and the owners of the MLB team, Fred Wilpon and Saul Katz, last month, which saw Einhorn pay $200m for a one-third stake in the Mets, gaining the right to obtain a 60% interest in three years unless Wilpon and Katz returned the $200m to Einhorn but allowed the hedge fund manager to retain his 33% ownership.
A banker familiar with the deal says the “strike price” for the 60% stake is just $1, and though the deal is not final and is subject to the approval from the league, its terms underscore the desperation of Wilpon and Katz, whose team is swimming in debt.
The Mets are also embroiled in a legal battle with Irving H. Picard, the trustee representing the victims of the fraud in Bernard L. Madoff’s Ponzi scheme, who is seeking $1bn from the Wilpon family. If the Wilpons do have to pay hundreds of millions of dollars to settle with Picard it is hard to see how Einhorn will not ultimately get control of the Mets for a dollar.