Until Monday night, Arsenal insiders thought that Landsowne Partners, who are friends of Danny Fiszman, would not sell to Danny’s enemies.
Lansdowne is a hedge fund in Mayfair with 16 partners and 90 employees in total. They manage investments worth £11 billion, so £20 million worth of Arsenal shares was not a massive part of their business. The guys who run the funds are Stuart Roden, an Arsenal fan and season-ticket holder, and Peter Davies, a Nottingham Forest fan. In the past they held shares in Manchester United and sold them to the Glazers at a healthy profit.
When offered £10, 250 per share by Red & White, Lansdowne sold. Business is business and that was what I expected to happen at some point. That £20 million transaction, along with David Dein’s £75 million sale, represents a watershed in Arsenal’s history.
Usmanov has been in touch with Stan Kroenke’s people and on Sunday The People suggested that Kroenke’s 12.19% stake could be sold for £ 80 million. If that happened, Usmanov would have 33% of the club and would have to make an offer for all the shares. Which the other shareholders could turn down.
The price of £10,250 was a revealing price. It’s £2,000 above the price Usmanov paid for 260 shares earlier the same day.
That tells you that Usmanov doesn’t care about the share price. Danny Fiszman cares, Lady Nina cares, Kroenke cares, Lansdowne cared. But Usmanov doesn’t care if the share price is £8,0000 or £9,000 or £10,000 or £11,000. We know that now. We didn’t know that on Monday.
So that’s where we are on Wednesday, September 19. Stan Kroenke is an American billionaire who cares about the share price and Alisher Usmanov is a Russian billionaire who doesn’t care. When big players buy companies, they are the market.On Monday night, when Usmanov bought those shares from Lansdowne, Usmanov was the market. Right now, Usmanov is the market. So the share price will go wherever he wants it to go.
Conventional wisdom suggests that someone who wants to take over a business buys up 29.9 %. That’s normally the next move. The language of investment bankers is quite moderate and they usually talk of their clients being “willing to pay a full price for the business.”
Significantly, Stan Kroenke still intends to go ahead with the broadband deal and the board do not believe Kroenke will sell his 12% to Usmanov.
As I’ve said for the last year, Arsenal is becoming a £1 billion enterprise.
The club’s financial results are published next week and will reveal a booming business that’s turning over £180 million a year. In Spain they claim Real Madrid’s turnover is bigger.But maybe Arsenal’s numbers are more credible. London is the biggest city in Europe and the richest city, and Arsenal is the biggest club in London and the second biggest in the EPL.
Why has this power struggle happened? Quite simple. Because Fiszman kicked David Dein off the board. It’s better to keep your enemies nearby, where you can see what they’re doing. As president LBJ said about FBI chief J. Edgar Hoover, “I’d rather have him inside the tent pissing out than outside the tent pissing in.”
Whatever pundits say, and whatever Dein says, it’s now clear that Usmanov wants control of Arsenal. He spent £23 million on Monday and he obviously wants control. The price he paid Lansdowne tells us that.
In April 2008, the “lockdown agreement” between the Arsenal directors, promising not to sell their shares, expires. By co-incidence, so does the current Russian government of Vladimir Putin.
After April, the future power structure of Russia will be made clear for the next eight years. And Usmanov, as the investment chief of Gazprom, will be part of the Russian power structure until 2016. By then the Russians will be rich enough to buy every Premiership club.