Stocks of Italian soccer team AS Roma closed the session yesterday with a 49.8% jump to 0.222 euros, after US entrepreneur Dan Friedkin’s takeover bid at 0.1165 euros per share had failed last November 6th. That was a price at the lows of the last 5 years for the stock (see the press release here). The takeover bid launched on October 9th last had to initially close on October 29th (see here a previous article by BeBeez) and the expiry date was then proposed to November 6th (see here BeBeez’s Insight View on football m&a deals in the last 30 years, dedicated to BeBeez News Premium subscribers).
However, only shares equal to 0.2% of the issuer’s share capital and 1,674% of the shares subject to the offer were delivered to the takeover bid. The takeover bid was promoted by The Friedkin Group, through the vehicle Romulus and Remus Investments LLC. The offer concerned a maximum of 84,413,785 ordinary shares of AS Roma, which represented approximately 13.4% of the share capital, after the closing of the sale to The Friedkin Group of 86.6% of the capital of the football club was signed on August 17th by previous owner James Pallotta, as part of a broader agreement that also involved the sale of a series of related assets, all for 591 million euros (see here a previous article by BeBeez and here the press release of August 17).
At this point, the next appointment remains the December 9th‘s one, the date of AS Roma shareholders’ meeting that will vote on the planned 210 million euros capital increase as announced on October 26th (see here the press release and here a previous article by BeBeez) to cover the consolidated net loss estimated at 204 million euros for the 2019-2020 financial year, against a negative consolidated shareholders’ equity for 242.5 million euros, down by 115 million euros compared to 30 June 2019 (see the press release here). At that point, the shareholders who did not join the takeover bid will have to decide whether to pay 0.33 euros per share or to see themselves further diluted. Friedkin will therefore be able to subscribe on that occasion all the new unexercised rights and rise further in the capital, this time hoping to be able to exceed the 95% threshold, which in this case would require the delisting of the stock. In the meantime, Friedkin is also preparing to strengthen the team on a managerial level and, as reported by the Gazzetta dello Sport, has offered Stefano Scalera, currently Deputy Head of Cabinet of the Minister of Economy and Finance, to look after institutional relations for the club.
AS Roma, listed on Piazza Affari, is 83.3% controlled by NEEP Roma Holding spa, which in turn was owned 60% by AS Roma spv LLC and 40% by James Pallotta’s Raptors Holdco. AS Roma spv is a company owned by James Pallotta, Michael Ruane, Thomas Dibenedetto and Richard d’Amore and by Starwood Capital Group. AS Roma spv also owned a direct holding of 3.3% in the capital of AS Roma. In detail, Pallotta sold the entire stake held by AS Roma spv in the club, thus equal to 86.6% of the capital, at a price of 0.1165 euros per share. The transaction envisaged more generally that Friedkin would acquire 100% of the share capital of NEEP and other assets excluded from the perimeter of the AS Roma group, but closely linked to the company’s business, including the Trigoria sports center (AS Roma Real Estate ), and Stadio TDV spa, the company promoting the new stadium project; and two other companies controlled by Pallotta and partners and outside the perimeter of the AS Roma group, namely 100% of ASR Soccer LP srl and 100% of ASR Retail TDV.
We recall that in January 2020 Friedkin had put 750 million euros on the plate for the company, including 272 million in net financial debt and the capital increase for a maximum of 150 million (see here a previous article by BeBeez). The negotiation then stalled last March due to the coronavirus. Romulus and Remus Investments as at 31 August had already further developed the portfolio (see the press release here) and had supported the working capital needs of AS Roma through a shareholder loan of 10 million euros, made through the parent company NEEP . Furthermore, in September Romulus and Remus Investments carried out, again through NEEP and again to support the working capital needs of AS Roma, an additional shareholder loan for a further 53 million euros.
Finally, again through NEEP, a new shareholder loan for 14.6 million euros was disbursed for the costs of the transaction with which ASR Media and Sponsorship spa paid the so-called Consent Fee to the bondholders following the approval by part of the meeting of the bondholders themselves, of the granting of some waivers to make some changes to the regulation of the loan, which, given the change in control of ASR Media, would have involved the repayment of 101% of the entire senior secured bond of 275 million of euro listed on the Third Market of the Vienna Stock Exchange and issued by ASR Media and Sponsorship spa in August 2019 (see here a previous article by BeBeez).