The four contenders vying to buy Chelsea will submit final bids on April 11, paving the way for a prospective new owner to seek government permission to take over from Roman Abramovich by the end of next month.
Sky News has learned the remaining contenders have been notified by Raine Group, the merchant bank handling the Blues’ sale, that binding offers must be made on or around that date – which falls the day before the second leg of a Champions League quarter-final against Real Madrid.
Bidders – who include several US sports franchise-owning billionaires – will have the opportunity to improve their offers from the indicative proposals which saw them make it through to the final stages of one of the most extraordinary corporate auctions of recent times.
The quartet of contenders had been told by Raine on Saturday they must commit at least £1bn to future investment in the club if they are to succeed in the battle to end Abramovich’s two-decade tenure.
The additional funding must be made available for the Blues’ Stamford Bridge stadium, playing squad and other areas of development.
Raine’s insistence on the pool of capital for investment is likely to go some way to reassuring supporters its new owner will continue to back it with the kind of significant financial resource they have become accustomed to under the Russian-born businessman.
All four of the remaining bidders have significant experience in sports stadium infrastructure, a key consideration given Chelsea’s long-standing dilemma about the expansion of Stamford Bridge, which has a capacity barely half that of Manchester United’s Old Trafford home.
Between them, the final bidders either control or own stakes in US teams including the Boston Celtics, the Chicago Cubs, the LA Dodgers, the Philadelphia 76ers and the Sacramento Kings.
Sir Martin Broughton, the former British Airways and Liverpool FC chairman, and Lord Coe, the former British Olympian turned sports administrator and businessman, are fronting a bid that has the financial firepower of Josh Harris and Dave Blitzer, two wealthy American financiers.
That consortium also includes Vivek Ranadive, an Indian-born entrepreneur, and a syndicate of other investors from around the world whose identities are expected to be confirmed in the coming days.
Another of the leading contenders is headed by Todd Boehly, the LA Dodgers part-owner, and includes Jonathan Goldstein, the London-based property developer, and Clearlake Capital, a US-based investment firm.
A third group comprises the Ricketts family, which owns the Chicago Cubs, and the Citadel hedge fund billionaire Ken Griffin, with the US investment bank Lazard in talks to advise it.
Tom Ricketts, the Cubs chairman, flew to London last week to address concerns raised by fans’ groups about Islamophobic remarks made by his father, Joe, a decade ago.
People close to the bid have insisted Joe Ricketts has no involvement in it, and have pointed to the family’s successful ownership of the team, having won the World Series for the first time in a century and completed a $1bn (£760m) renovation of its home, Wrigley Field – one of the most historic sports arenas in the US.
The other remaining contender for Chelsea is a bid spearheaded by Stephen Pagliuca, an American private equity billionaire who owns the Boston Celtics and Atalanta in Italy’s Serie A.
Sky News revealed this weekend a so-called ‘blank check’ vehicle set up by one of the world’s most powerful media tycoons also tabled a proposal to merge with Chelsea this month.
City sources said Liberty Media Acquisition Corp (LMAC), a New York-listed special purpose acquisition company – or SPAC – was among the parties which was eliminated from the auction, largely because of the complexity of finalizing a deal on a timetable which was truncated by Abramovich’s sanctioning.
Mr Malone, who has placed huge bets on sports by engineering the takeovers of Formula One motor racing and the Atlanta Braves Major League Baseball team, is said to have lodged a credible offer for Chelsea.
Had it been successful, it would have seen Chelsea join Manchester United as a US-listed company.
Sources said Raine would assess the four bids against a set of criteria including the level of equity and debt funding; price; future investment commitments; speed and certainty of execution; and the claims each party has to being an appropriate steward of a prestigious sporting brand.
Among the bidders who were eliminated from the process this week were offered fronted by the London-based property developer and lifelong Chelsea fan Nick Candy; the former US ambassador to the UK, Woody Johnson; Centricus, an asset manager; and Saudi Media Group, whose bid is said to have been largely debt-financed.
Formal deal to approve transaction expected by the end of next month
Raine is understood to anticipate signing a formal deal and approaching the government for a special license to approve the transaction by the end of next month.
Bidders and bankers have dismissed suggestions some parties had become frustrated by the pace of the transaction’s progress.
By the standards of conventional takeover processes, the Chelsea auction has moved at breakneck speed, with executives at other major investment banks suggesting that such a complex sale would typically have taken at least six months.
Abramovich’s sanctioning by the UK Government has added further complications to the transaction, as bidders have sought clarity on the legal implications of buying the club.
Sources also pointed out further bidders had continued to emerge even in the last week, requiring Raine to evaluate their seriousness.
Some fan groups have questioned the absence of a wealthy British businessman from the process, although Sir Jim Ratcliffe, the Ineos tycoon who is now based in Monaco, did express an interest before deciding not to lodge a formal offer, according to insiders.
A number of the remaining bidders are expected to make further refinements to the composition of their bids in the next fortnight.
The auction of Chelsea has become the most hotly contested – and potentially the richest – sale of a leading sports franchise in history, with hundreds of parties expressing an initial interest in buying a share of the club or controlling it outright.
The cluster of American sports billionaires circling Chelsea underlines the extent to which the English Premier League has become a magnet for financiers from across the Atlantic, with Arsenal, Liverpool and Manchester United all having been acquired by US-based businessmen.
Prior to being sanctioned, Abramovich had said he intended to write off a £1.5bn loan to the club and hand the net proceeds from the sale to a new charity he would set up to benefit the victims of the war in Ukraine.
Last week, the government agreed to further amend the license allowing Chelsea to continue operating, with the club now able to resume selling tickets for away matches.
The proceeds are to be retained by the Premier League and earmarked for a Ukrainian war victims charity.
Chelsea can also now receive £30m from the club’s parent company to ease cashflow constraints caused by the current crisis.
Rapid sale essential if Chelsea is to avert uncertainty
A rapid sale is seen as essential if Chelsea is to avert the uncertainty that would trigger the break-up of one of the top flight’s most valuable playing squads.
The current FIFA Club World Cup winners have been thrown into disarray by Russia’s war on Ukraine, with Abramovich initially proposing to place the club in the care of its foundation and then formally putting it up for sale.
Abramovich had initially slapped a £3bn price tag on the club, with the net proceeds being donated to a charitable foundation set up to benefit the victims of the war in Ukraine.
As well as government consent in the form of a special licence, Chelsea’s new owners will also require the approval of the Premier League under its fit and proper ownership test.
Raine has dismissed a report suggesting it was in line to be paid a fee worth 1.5 per cent of the transaction value, which would have been equivalent to £45m if Chelsea is sold for £3bn.
Bidders are said to have been informed Raine’s fee is substantially lower than that, and is partly contingent upon both the scale of the ensuing proceeds to charity, and the level of guaranteed future investment in Chelsea.
Raine declined to comment on any other aspect of the bidding process besides disputing the report of its fee, while spokespeople for the consortia all refused to comment.