Business

Silver Lake ramps up stake in Manchester City owner

US private equity firm Silver Lake cemented its position as the second largest shareholder in Manchester City’s parent company, as the group’s Chinese investors cut their stakes to nearly zero.

CFG confirmed that the Silicon Valley-based company now owns more than 18 percent of City Football Group after buying more shares from China Media Capital.

Sheikh Mansour bin Zayed Al Nahyan, the billionaire royal who acquired Manchester City in 2008, also increased his stake as the controlling shareholder in the parent group through the Abu Dhabi-based Newton Investment and Development Company. Under his control, Premier League champions Manchester City have transformed into the dominant force in English football.

Silver Lake’s continued appetite to build its position in CFG highlights institutional investors’ appetite to buy into elite sports assets. It is also a symbol of how Chinese buyers have withdrawn from European football since Beijing tightened capital controls.

The Financial Times reported last month that commercial bank Raine Group is looking for buyers for Italian football club Inter Milan, which is controlled by Nanjing-based electronics retailer Suning. Inter said it would consider investing rather than selling out. Other Chinese investors have previously sold stakes in clubs ranging from English Premier League club Aston Villa to France’s Lyon.

Meanwhile, American investors Todd Bohle and Clearlake Capital in May acquired Chelsea for £ 2.5 billion, which is a record for the acquisition of football clubs. That deal set a benchmark for elite clubs.

The Glazers said this week they would consider selling Manchester United after 17 years of ownership, just weeks after it emerged that billionaire commodities trader John Henry Fenway Sports Group was weighing the issue of finding a buyer or new investors for the Liverpool club.

City said the recent Silver Lake deal was “further support” to its business model and “continued international growth.”

“CMC remains an important partner for CFG, particularly in China,” the group said.

CFG declined to comment on the financial details of the deal. The group, which owns soccer clubs around the world, was valued at $4.8 billion when Silver Lake bought its original 10 percent stake.

Silver Lake did not immediately respond to a request for comment.

Citi said the Chinese shareholder still owns 1 percent of CFG and will continue to transfer “significant knowledge and experience” to the board.

The deal took place earlier this week, with CMC selling a 7.24 percent stake in the group. Silver Lake bought half of the shares, while the Newton car driven by Sheikh Mansour acquired the rest.

The deal means that CMC has given up its seat on CFG’s board of directors, and media mogul Li Ruigang has resigned. At one point, CMC owned as much as about 13 percent.

Silver Lake has established close ties with Abu Dhabi. The technology-focused investment firm originally acquired shares in CFG after Hollywood executive Ari Emanuel — founder of Endeavor — introduced managing partner Egon Durban to CFG’s Khaldoon Al Mubarak. Mubarak is the CEO of Mubadala, an Abu Dhabi sovereign investment fund that acquired a stake in Silver Lake in 2020.

Silver Lake previously increased its stake in CFG to 14.5 percent by acquiring a separate block of shares from CMC.

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