May 6 (Bloomberg) -- Stan Kroenke, the owner of National Football League and the National Basketball Association teams, said he won’t take out debt against Arsenal soccer club to fund his proposed takeover of the English Premier League team.
Kroenke today submitted the offer document for the mandatory takeover bid triggered last week when he boosted his stake in the club to 63 percent by agreeing to buy 16 percent stakes of former directors Danny Fiszman and Nina Bracewell-Smith.
Arsenal fans wanted Kroenke to pledge that he wouldn’t pay for the 13-time English champion the way the U.S.-based Glazer family bought Manchester United in 2005 and Tom Hicks and George Gillett acquired Liverpool. Both groups angered fans by using funds from their newly acquired Premier League teams to repay interest payments on takeover finance.
“The offer will not be funded by way of any debt finance for which the payment of interest on, repayment of or security for any liability will depend on the business of Arsenal,” said a note in the offer document released by KSE, UK Inc., the company used by Kroenke to buy the team.
Kroenke said he’ll respect the club’s current structure by pursuing its so-called “self-sustaining” model. He’s also said the club would remain listed on the PLUS stock exchange even if he acquires sufficient shares to take it off the market. Arsenal’s second largest shareholder Alisher Usmanov, who holds 27.1 percent of the club, said he won’t sell his holding.
The purchase price of 11,750 pounds a share values the club at about 731 million pounds ($1.2 billion). Kroenke, who started investing in Arsenal in 2007, is being advised by Deutsche Bank AG. The property developer also owns the National Basketball Association’s Denver Nuggets, the St. Louis Rams of the National Football League, the National Hockey League’s Colorado Avalanche and Major League Soccer’s Colorado Rapids.
Kroenke said he would continue to meet with the club’s supporters after the transaction is completed.
“He recognizes that fans are at the heart of the club,” the offer document said. “Their opinions and involvement are important to him. Mr. Kroenke fully expects himself, the Arsenal directors and club executives to continue to engage with supporters for the long-term good of the club.”
The Arsenal Supporters Trust, which has met with Kroenke, reiterated that it planned to keep its holdings and urged other shareholders “to reject this offer.” The AST and other fans have complained about the 6.5 percent ticket increase Arsenal plans for next season.
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