[HONG KONG] The Chinese consortium attempting to buy the AC Milan soccer team has been hunting for more investors since it agreed on a deal with Silvio Berlusconi's Fininvest SpA, people with knowledge of the matter said.
The little-known buyer group, led by businessman Li Yonghong, is sounding out interest from new investors, the people said. The consortium didn't have all the financing in place when it agreed last month to purchase AC Milan for 740 million euros (S$1.1 billion) including debt, according to the people, who asked not to be identified because the discussions are confidential.
Mr Li's group would also consider building a new stadium as part of its expansion plans, according to two of the people. The consortium has been telling potential partners they could earn outsized returns if AC Milan eventually lists on a Chinese stock exchange, where companies trade at a premium to Western markets, the people said.
The Chinese consortium, known as Sino-Europe Sports, is seeking money from new partners to help meet its stated goal of completing the deal by year-end. The late-stage fundraising attempt highlights the dilemma faced by Western companies' boards that must weigh the allure of higher prices offered by Chinese suitors with the complications that can arise if financing isn't all in place.
Sino-Europe Sports "is in the final stage of the acquisition and has been providing project information to existing financing partners and other interested parties as a part of the closing process, which will be completed at the end of this year," it said in an e-mailed statement.
"The acquisition of the funds will be also fully in place at the same time." A representative for Fininvest declined to comment.
The Chinese consortium has already paid a non-refundable deposit of 100 million euros in two tranches, Fininvest said last week. The purchase agreement also includes a requirement to provide another 350 million euros of funding to AC Milan over a three-year period.
Haixia Capital Management Co, an investment firm controlled by China's government-owned State Development & Investment Corp, is joining Mr Li in the purchase, according to the August deal announcement, which didn't name any other companies. Fininvest said at the time that the Chinese buyer group also includes "companies active in the financial industry and others in industrial sectors," without providing further details.
In an earlier draft of the fundraising materials, the Chinese investor group indicated the team's value could multiply several times in the long term to reach 2.9 billion euros, rivalling top clubs like Real Madrid and Manchester United Plc, according to documents obtained by Bloomberg.
The acquirer predicted its plan to revive the storied team would help annual revenue more than double to 500 million euros in five years. It plans to open up the Chinese market with licensing and endorsement deals, the documents show.
AC Milan has struggled in recent years, with the team a shadow of the squad that once regularly competed for soccer's top prizes. Since Mr Berlusconi took control of the team in 1986, Milan has won eight league titles and five European cups, marking the most-successful period in the club's history.