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Why Investcorp (and Bahrain) decided to focus on Milan: the questions to better understand the negotiations of the moment

Why Investcorp (and Bahrain) decided to focus on Milan: the questions to better understand the negotiations of the moment

Negotiations have been underway for months, and after working in the shadows, Investcorp is ready to take final action. After the long Berlusconian saga, after the annual Yonghong Li arc, which lasted just over a year from April 2017 to July 2018, and four years after the Eliot era, AC Milan He is now approaching a new transfer of ownership.

Reaching the top of the Barhain Sovereign Investment Club is a historic event not only for club Milan, but also for all Italian football. Let’s try to understand the situation, developments, the future and what lies behind this new acquisition point by point.

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Who is Investcorp and why is it so powerful?

Arab Fund Investcorp is a global investment giant with assets of more than $40 billion. It originated in Bahrain and since 1982 (the year it was established) invests in markets and development projects from the Middle East, then often resells the assets created at much higher prices. It has offices all over the world: New York, London, Singapore, Doha, Mumbai. its head, Muhammad Mahfouz Al-Ardhi (or Accidental), an Omani, is a former military man (combat pilot) and is currently the CEO of this fund and Bank Sohar. He also held the position of President of the National Bank of Oman.

Milan Investcorp

Image credit Eurosport

Why do you want to invest in sports?

Investcorp is not a national sovereign fund, like the Saudi Public Investment Fund (Pif) which acquired more than 80% of Newcastle United or Qatar Sports Investments (a subsidiary of the Qatar Investment Authority, Qatar’s sovereign, which governs PSG) last fall. Prince of Manchester, owned by City Football Group, a company majority-owned by the Abu Dhabi Group, and which is linked to the UAE’s sovereign wealth fund. He comes from the Burhain region and wants to compete with the princes and Saudis around the world, above all to discuss the vision. The sport can generate fleeting wealth, the bad reputation that football guarantees opens another glimmer in other sectors. Politics, geopolitics, politics, fame, image and business: these are the reasons.

And why in AC Milan and Italy?

Because Milan is an opportunity because there are no others.”football brands“Free with the glory and fame that the Rossoneri still has. Because Elliott wants to monetize the investment that was made about four years ago and because Italy is a “virgin” country from the point of view of real estate in the Middle East. Last September, during an interview with Bloomberg, the president explained CEO Mohammed Al-Ardhi said that the fund’s goal is to manage $100 billion in assets (currently in portfolio 41.2), through acquisitions, employee growth and joint ventures, including in the sports sector.

But isn’t Investcorp investing in sports yet?

He did it in a simple way, just to experiment. In fact, this would not be an absolute debut in European football, given that the Bahraini sovereign investment fund acquired 20% of the shares of Paris FC, a company from Paris that currently plays in Ligue 2, a little less than two years ago. Start, but Milan presents a very impressive opportunity.

Contradiction between a player in Paris and a player in Lorient in the French Cup

Credit Photo Getty Images

How much will the investment be and what will it entail?

The number is what we are talking about these days and was confirmed directly with a tweet from the Bahrain embassy in the UK: “Investcorp, a Bahrain-based asset manager, is in exclusive negotiations to buy Italian club AC Milan for $1.1 billion.A very large amount, but it is “harmless” for such a fund.

The Italian example of Gucci about 30 years ago

Investcorp has already set foot in Italy, and knows our country and our traditions. The separation with the famous high-fashion brand Gucci lasted for nine years: he entered the fund in 1987, quickly becoming the largest shareholder and re-launching under the creative direction of Tom Ford and the managing director of the then advertising company Domenico De Sole. In 1994, he bought 100% of Gucci, paying about 300 billion lira; Two years later, at the time of the last stock sale, the Florentine fashion house was worth ten times its value. Financially amazing operation.

Gucci is, to date, one of Investcorp’s main investments in Italy

Credit Photo Getty Images

Future Scenarios: From the stadium to the big players, Milan will target the big names in Europe

If Investcorp acquires Milan, it does so with one purpose. Invest to relaunch the club, take it to the top in the world, and possibly resell it at its brightest moment. Money brings money, and vision brings vision. And in the last ranking of the richest teams drawn by Forbes magazine in 2021 in the lead was Barcelona, ​​with a value of 4.76 billion dollars, then Real Madrid (4.75) and Bayern Munich (4.215). The Italians were among the top ten, and even Juventus, worth 1.95 billion, were chasing from afar. Investcorp aims for this: to bring AC Milan to that elite, improve international marketing and merchandising, complete the stadium rhetoric and acquire the best players who bring the devil back to what he was fifteen years ago. Ambitious, but by no means impossible, given the catchment area of ​​the Rossoneri and the number of fans in the world.

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