Football: US tycoon buys out Arsenal co-owner, set to gain sole control of Premier League club

American sports mogul and tycoon Stan Kroenke will buy the 30 per cent stake held by his billionaire rival for £550 million, giving him complete control over Arsenal.
American sports mogul and tycoon Stan Kroenke will buy the 30 per cent stake held by his billionaire rival for £550 million, giving him complete control over Arsenal.PHOTO: EPA-EFE

Kroenke, as single major stakeholder, will take Arsenal private, incurring ire of fans

LONDON • The long-running battle between two billionaires for control of Arsenal has finally been won by Stan Kroenke. The American sports mogul and majority owner will buy the 30 per cent stake held by the Russian oligarch Alisher Usmanov for £550 million (S$971 million), with the deal valuing the club at £1.8 billion.

KSE, Kroenke's holding company, yesterday announced in a statement to the London Stock Exchange that Usmanov has given "irrevocable undertakings" to sell after 11 years as a substantial shareholder of the Premier League club.

Kroenke plans to pay for the shares with a loan that will be largely funded by Deutsche Bank, which is advising him on the deal.

The statement said that he also intends to exercise the legal right, which comes with 90 per cent ownership of a company, and force all remaining small shareholders - most of them Arsenal supporters - to sell their shares to him.

That stance, and Kroenke's intention to take the club off the stock exchange and reconstitute it as a private company wholly owned by him, was criticised by the Arsenal Supporters' Trust (AST), which described the announcement as "a dreadful day for Arsenal".

KSE's statement, which highlights Kroenke's ownership of various American football, basketball, ice hockey and Major League Soccer teams, insists his "commitment to Arsenal remains unwavering".

The explanation given for taking the club private and compulsorily acquiring all the remaining shares was that "moving to that model will bring the benefits of a single owner (that will be) better able to move quickly in furtherance of the club's strategy and ambitions".

Although Usmanov's decision marks ultimate defeat for his consistently stated ambition to become the Gunners' majority owner, his profit on selling the shares will amount to around £300 million.

His spokesman said the sale was prompted by a realisation that Kroenke, who had acquired 67 per cent of the club since 2007, was not going to cede any control or shares to him.

The fans' trust has lambasted Kroenke's ownership in recent years for Arsenal's relatively disappointing performances under former manager Arsene Wenger, culminating in last season's sixth-placed finish, and for payments to KSE of £3 million in 2014 and 2015, for "advisory services".

Its statement said the buyout would "remove shareholder scrutiny", including at annual general meetings which have seen the American put on the spot.

"The most dreadful part is that Kroenke plans to forcibly purchase the shares held by Arsenal fans."

The fans hold their shares, not for value, but as custodians who care for the club's future, AST said.

Usmanov's company, Red and White Holdings, confirmed he had agreed to sell his 18,695 Arsenal shares for £29,419.64 each, and issued a statement from him saying: "I have decided to sell my shares in Arsenal. I wish all the best and great success to this wonderful football club, and to all those whose lives and careers are entwined in it."

BLOOMBERG, THE GUARDIAN

A version of this article appeared in the print edition of The Straits Times on August 08, 2018, with the headline 'US tycoon buys out Arsenal co-owner'. Print Edition | Subscribe