Arsenal’s shares surged on expectations Russian billionaire Alisher Usmanov and fund manager Farhad Moshiri will increase their stake after buying 15 percent of the soccer club from former Vice-Chairman David Dein.
The stock climbed as much as 12 percent to 7,950 pounds in London, valuing the club at 494.6 million pounds ($998.9 million). The shares, which reached a record high of 8,250 pounds July 25, have climbed 72 percent in a year.
“The markets are clearly excited at the prospect of another Russian billionaire taking over a Premiership club,” said Henk Potts, who helps oversee $45 billion at Barclays Stockbrokers in London. “But it’s going to be a long, tough battle. The Arsenal directors won’t give up control easily.”
Dein is chairman of Red & White Holdings Ltd., the company that bought his 15 percent. His next move may be to try to convince U.S. billionaire Stan Kroenke, who owns 12 percent, to join with Usmanov and Moshiri and put pressure on the directors of Arsenal, who control 45 percent of the equity, Potts said.
Usmanov is worth $2.6 billion, according to Forbes. He’s a director of the investment unit of Russia’s OAO Gazprom, the world’s largest natural-gas company, and owns a majority of closely held mining company ZAO Metalloinvest.
Moshiri, who is chairman of Metalloinvest, owns 9.9 percent of Panmure Gordon & Co., a 131-year-old U.K. stockbroker and investment bank.
Dein’s Departure Dein left Arsenal, which is based in north London, in April after 20 years because of what the club called “irreconcilable differences” about the company’s future direction.
Arsenal may become the 10th English Premiership club to be bought by overseas investors. Since Russian billionaire Roman Abramovich took control of Chelsea four years ago, Manchester United, Liverpool, Aston Villa, Portsmouth, Manchester City, Sunderland and West Ham have been bought by non-British citizens. Mohamed Al-Fayed, the Egyptian who owns Harrod’s department store in London, acquired Fulham in 1997.
In addition to the prestige of owning a club in the world’s most popular soccer league, billionaires are attracted by the record 2.3 billion pounds global broadcasters will pay over the next three seasons to televise games. That’s 77 percent more than under the previous contracts.
“This purchase of mine is not a strategic or political one; it’s a portfolio investment,” Usmanov told London’s Evening Standard newspaper today. “Arsenal as a business is undervalued. My aim is to steadily increase my package because I think the value of it will grow.”
Kroenke, a real-estate investor, also owns basketball’s Denver Nuggets, hockey’s Colorado Avalanche and Major League Soccer’s Colorado Rapids. Messages left for him yesterday at his Denver office and with the Nuggets weren’t returned.
Dein said after completing the sale yesterday that Arsenal needs outside investment to continue to stay competitive. The club accumulated 260 million pounds of debt building a new 60,000-seat stadium, which it moved into a year ago.
Arsenal Managing Director Keith Edelman today rejected Dein’s argument.
“We’re in a very good financial position,” he told the club’s Web site. “I just see this as a shareholding moving from one party to another.”
