April 13 (Bloomberg) -- Russian billionaire Alisher Usmanov won’t sell his stake in Arsenal to fellow investor Stan Kroenke because the English Premier League soccer club “can’t do without me.”
Kroenke, who owns teams in the National Football League and the National Basketball Association, triggered a mandatory takeover bid for the club after boosting his holding to 63 percent two days ago. Usmanov, who made his $18 billion fortune through metal investments, is Arsenal’s second-largest shareholder with 27 percent of the London team.
“I’m not going to sell,” Usmanov said in a telephone interview from Moscow today. “I love Arsenal, that’s why I’m a shareholder.”
The Russian has been vying with Kroenke for control of the 13-time English champion for several years. He owns two boxes at the club’s 60,000-capacity Emirates Stadium and has four seats in the directors’ box.
Both men’s overtures were initially rejected by the Gunners’ board and former ownership. Kroenke was invited onto the board in 2008, while Usmanov hasn’t been. The Russian’s offer to underwrite new shares to help the team compete for the game’s best players was rejected in 2009.
“My principle in regards to Arsenal is that it can’t do without me,” Usmanov said.
Kroenke made his offer of 11,750 pounds ($19,111) a share to all shareholders after crossing the 30 percent threshold that makes bids compulsory. He agreed to acquire the 16 percent stakes of board member Danny Fiszman and Nina Bracewell-Smith, whose family has been associated with the team since 1938. Arsenal today said Fiszman, who’d been fighting cancer, died at age 66.
Bracewell-Smith was forced off the board in 2009 by other directors, including chairman Peter Hill-Wood. When Kroenke began to get involved at the club in 2007, Hill-Wood said the club “don’t need his money and don’t need his sort.” Hill-Wood will make 4.7 million pounds from the sale.
Usmanov said the Arsenal board’s decision to recommend Kroenke’s offer to shareholders came as surprise because it had always promoted a plural ownership structure.
“The board of Arsenal always held the position that none of the shareholders should take control over the company,” the 59-year-old Usmanov said. “That is why I never did any offer to increase my stake more than 50 percent. But probably something has changed, to my surprise.”
Usmanov’s decision means he retains some control over what Kroenke can and cannot do with the club’s finances. Though the new majority investor can pay himself a dividend, he won’t be allowed to withdraw management fees from Arsenal. Kroenke said the takeover won’t be debt-financed.
The Arsenal Supporters Trust, which represents small shareholders, welcomed Usmanov’s decision. It’s been telling members not to sell stock to Kroenke because the group doesn’t want the club to be owned by one individual.
In a statement the AST called for “all shareholders to work together” to make Arsenal successful.
Kroenke, an American billionaire property developer, had already owned almost 30 percent of Arsenal, and will have to offer other shareholders the same price as Fiszman and Bracewell-Smith. Kroenke, who owns the NBA’s Denver Nuggets and the St. Louis Rams of the NFL, will spend 240.6 million pounds ($392 million) on the share purchases.
“We know that Kroenke is a large investor in sports brands,” Usmanov said today. “We hope that experience will help Arsenal.”
He also gave his backing to manager Arsene Wenger, whose position has been questioned by some supporters because of his refusal to spend heavily to recruit players they say are necessarily to snap a six-year run without a trophy.
“I am big fan of Arsene Wenger and as long as he heads the team, I am sure of Arsenal’s success,” he said.
Usmanov first took a stake in the club in 2007, when he bought 15 percent for 75 million pounds from former board member David Dein.