Arsenal Investor Usmanov Seeks to Increase Stake in Soccer Club to 29.9%

Metalloinvest owner Alisher Usmanov wants to raise his stake in Arsenal Holdings Plc to 29.9 percent, which would help him to block any takeover attempts of the English Premier League soccer club.

The Russian billionaire, who now holds 27 percent of the team, made the pledge today on state television. He and U.S. billionaire Stan Kroenke have built up their holdings in the north London club in recent years, prompting takeover speculation.

“I chose to invest significant money in Arsenal because I consider it to be one the world’s most well-structured football clubs, with one of the best stadiums and led by a genius coach, Arsene Wenger,” Usmanov said in the Russian broadcast. “I don’t regret this investment. It’s not dropping in value, it’s rising only.”

Usmanov and his partners in Moscow-based OAO Metalloinvest plan to raise as much as $4 billion selling 20 percent of the country’s largest iron-ore producer in the first half of 2011, according to two people familiar with the matter who declined to be identified last month because talks are private.

Kroenke owns the National Basketball Association’s Denver Nuggets, hockey’s Colorado Avalanche and in August won approval to take over the National Football League’s St. Louis Rams.

Shareholders

The American owns a 29.98 percent stake in Arsenal, with Danny Fiszman holding 16.11 percent and Nina Bracewell Smith has a 15.90 percent holding, according to the Arsenal website. Bracewell Smith put her stake up for sale in April.

“The goal is to increase the holding up to a blocking stake, 29.9 percent,” Usmanov said. “Afterwards, we’ll see what to do further. If all the shareholders are united by then like they are now, we’ll keep it as that level.”

If either investor were to buy Bracewell Smith’s stake it would breach the 30 percent threshold to trigger a mandatory takeover bid. At the current price, Arsenal has a market value of 692 million pounds ($1.1 billion).

In September, Arsenal Holdings said its fiscal-year profit increased 73 percent to a record 61 million pounds as the club sold apartments on the site of its former stadium.

Sales rose 21 percent to 379.9 million pounds in the year ending May 31, the London team said Sept. 24. That’s the highest recorded by an English soccer team, allowing Gunners to reduce their net debt by more than half to 135.6 million pounds.

Arsenal fans in August introduced a new plan allowing them to buy small stakes in the club which they hope may help preserve the team’s ownership model in which no single investor has a controlling stake.

The Arsenal Fan share initiative, drawn up by Arsenal Supporters’ Trust and endorsed by the 13-time English champion and its four largest shareholders, allows fans to buy one- hundredth of a share for about 100 pounds each. They currently trade at 11,125 pounds each.

To contact the reporter on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net; Danielle Rossingh in London at +44- drossingh@bloomberg.net.

To contact the editor responsible for this story: Christopher Elser at at celser@bloomberg.net.

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