By Andrew Warshaw
August 7 – American billionaire Stan Kroenke, the major shareholder in Premier League Arsenal, looks set to buy the rest of the club in a deal that would value it at £1.8 billion but which, while unifying the shareholding under one owner, is already splitting opinion amongst supporters.
Kroenke, who already owns 67% of Arsenal, has long been locked in battle with Russian rival and 30% shareholder Alisher Usmanov. Both have made offers for each others’ shareholdings but it was a battle Usmanov was never likely to win as his shareholding did not give him a seat on the board. Usmanov nevertheless had resisted selling until now, but will go for about £600 million. Kroenke will also buy out the remaining independent shareholders.
Kroenke, who also owns the U.S. Denver Nuggets NBA team and the Los Angeles Rams NFL franchise, said in a statement to the London Stock Exchange (Arsenal shares are quoted on London’s Nex Exchange) that he wanted to take Arsenal private to make it smoother to operate.
The move comes at a crucial time for the north London club which is entering a new era after long-time manager Arsene Wenger stood down in April after 22 years in charge and gave way to Unai Emery.
“We at KSE are moving forward with this offer leading to 100% ownership of the club,” Kroenke said in a statement through his company. “We appreciate Mr Usmanov’s dedication to the Arsenal Football Club and the storied ethos and history the club represents.”
Kroncke has had a fraught relationship with Arsenal fans but insists his ambition is to see the club “competing consistently to win the Premier League and the Champions League”, a tall order in the short term at least. In Wenger’s final season, Arsenal finished sixth in the Premier League and start their new campaign with a mouth-watering fixture against champions Manchester City on Sunday.
Kroenke says he will be raising the capital to take control of the club with £45 million of his own money and borrowing £557 million, which he says will not be secured against Arsenal’s commercial operations (unlike the Glazer family’s ownership of Manchester United).
“The offer is not being funded by way of any debt finance (bank loans, payment in kind loans or other debt or quasi debt interest bearing obligations) for which the payment of interest on, repayment of, or security for any liability (contingent or otherwise) will depend on the business of Arsenal,” said the statement.
KSE says it has received an “irrevocable undertaking” from Red and White Securities, Usmanov’s company, to accept the offer as soon as possible and by 3pm on Tuesday at the latest.
In October last year KSE offered £525 to buy the shares held by Usmanov while the Russian billionaire himself failed with a £1bn takeover bid and has become frustrated at not having a seat on the board or any say over the running of the club. Now it appears Kroncke has won the battle, securing private ownership in line with a majority of Premier League clubs.
“The successful implementation of the offer will result in the opening of a new chapter in the history of the club in bringing 100 per cent private ownership by KSE. KSE believes moving to private ownership will bring the benefits of a single owner better able to move quickly in furtherance of the club’s strategy and ambitions. KSE is a committed, long-term owner of the club,” the statement said.
While some Arsenal fans will hope having one single owner will make key decisions easier, the majority will be concerned at the club effectively being run from the United States with less transparency. It remains to be seen whether sole ownership will increase investment, allowing the club to once again compete for major honours, or whether it will continue to lag behind rivals.
Although Kroenke says the deal will benefit the club, which has certainly made its intentions clear with a flurry of eye-catching transfers during the summer window, the official Arsenal Supporters’ Trust (AST) made their feelings known by describing the news “a dreadful day” for the Gunners.
“Stan Kroenke taking the club private will see the end of supporters owning shares in Arsenal and their role upholding custodianship values,” said an AST statement. “The AST is wholly against this takeover which marks a very sad day for Arsenal football club.”
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