Kroenke Ups Arsenal Stake to 62.9pc Valuing Club at USD1.2bn

April 11, 2011

American majority stakeholder in English Premier League soccer club Arsenal, Stan Kroenke has confirmed he has increased his stake in the club to 62.89 per cent as he closes in on a takeover.

Kroenke had owned 29.9 per cent of the club but has increased his shareholding after agreeing deals to buy shares owned by Danny Fiszman and Lady Nina Bracewell-Smith.

The deal sees Kroenke acquire the 16.1 per cent owned by Fiszman and Lady Bracewell-Smith’s 15.9 per cent stake to take his holding to 62.89 per cent.

Under stock market rules, having surpassed the 30 per cent threshold, Kroenke must now make a takeover bid to buy the remaining shares at the club at the highest price. This means that a takeover bid would be triggered and he has agreed terms for the purchase of the remaining stock which values the club at £731million (US$1.19bn).

The remaining major shareholder is Russian Alisher Usmanov who had been looking to build on his stake having increased it to 27 per cent earlier in the year. Usmanov now has a decision to make as to whether to sell his shares to Kroenke, if he were to do so he will earn almost £200m (US$326.9m) from his stake.

Terms have also been agreed for Kroenke Sports Enterprises (KSE) to buy up the remaining share capital at a cost of £11,750 ($19,226) a share. The group has announced an offer the club’s ownership company, Arsenal Holdings PLC, revealing that the offer will not be funded by debt finance secured against the club.

The Independent Directors of Arsenal comprising of Mr Hill-Wood, Ivan Gazidis, Ken Friar, Sir Chips Keswick and Lord Harris of Peckham have considered these confirmations as well as the offer price and, having received advice from an independent adviser, Rothschild, are recommending that shareholders accept the Offer.

In a statement to the Stock Exchange, Kroenke said: “We are excited about the opportunity to increase our involvement with and commitment to Arsenal.

“Arsenal is a fantastic club with a special history and tradition and a wonderful manager in Arsene Wenger.

“We intend to build on this rich heritage and take the club to new success. I am delighted that Peter Hill-Wood has agreed to support us by continuing as chairman.

“We especially wish to acknowledge and thank the board, Danny Fiszman and the Fiszman family as well as Lady Nina Bracewell-Smith and her family for the confidence they have had in me over the past years and in allowing us to move forward in this more prominent role.”

Four years ago Kroenke first took a stake in Arsenal, purchasing the 9.9 per cent which was owned by Granada.

Kroenke’s company also has major interests in sporting teams throughout America, owning the National Basketball Association’s (NBA) Denver Nuggets, Major League Soccer’s (MLS) Colorado Rapids and the National Football League’s (NFL) St. Louis Rams.