What RedBird investment in AC Milan could mean for FSG and Liverpool

The prospective sale of AC Milan may have taken a swing in favour of one of the interested parties that indirectly own part of Liverpool.

RedBird Capital Partners, the private equity firm that has owned 11 per cent of Liverpool owners Fenway Sports Group since March last year, are now believed to be the frontrunner to acquire a majority stake in Italian giants AC Milan from the US-based Elliott Management Corp, a fund lead by US investor Paul Singer.

RedBird had faced competition for the right to take over at one of European football’s biggest and most storied clubs, that are on the cusp of winning the Serie A title, with Bahraini investment fund Investcorp, but reports today suggested that they had put any plans to buy into the club on hold.

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It was then reported that RedBird are nearing a 1.3bn euro investment in the club, a deal that could eventually rise to 1.8bn in bonuses. Reuters reported that RedBird declined to comment.

Investcorp had been on their own in negotiations until the start of the month when the period of exclusivity between themselves and Elliott Management Corp lapsed without a deal finalised. That prompted RedBird, who also own a majority stake in French Ligue 2 champions Toulouse, a small shareholding in Spanish side Malaga and, indirectly, a stake in Liverpool through part ownership of FSG, to come to the table with their own offer to take over. Another team has been on the radar for RedBird for some time and they had looked at more than 80 teams before they acquired Toulouse in the summer of 2020.

But reports in Italy claim that Elliott Management, who weren’t actively looking to sell prior to Investcorp’s interest, are unhappy with the Bahraini fund over them placing an ultimatum on a decision being made by the current AC Milan owners following RedBird’s arrival into negotiations.

Italian daily sports newspaper Tuttosport claim that the ultimatum to AC Milan owners from Investcorp, first reported by Gazzetta dello Sport, was not well received by Elliott Management, who are not keen to be rushed on the deal. Tuttosport also suggest that Elliott Management have been less than impressed by Investcorp spokespeople briefing the media during discussions.

RedBird have kept their counsel on any negotiations with AC Milan over a potential takeover deal, but the ECHO understands that any deal struck would not effect the long-term plan with FSG, with whom they invested $750m worth of capital last year and intend to do more with, nor will it create any conflict of interest with regards to ownership, with both clubs competing in next season’s Champions League. UEFA have rules in place to avoid such things and it is understood that the separation between RedBird’s investment into FSG, and not directly into Liverpool where they have no representatives involved in the running of the club or sitting on any club boards, and any ownership of AC Milan would not contravene UEFA law.

RedBird recently filed documents ahead of the launch of their fourth investment fund, one that seeks to raise a similar amount to the $2.6bn that the third fund did in 2021. The firm want to continue to expand and acquire business and sporting interests, and there is the potential for them to increase the amount of capital that they have already invested with Liverpool owners FSG.

“I would be very disappointed if I don’t significantly increase the amount of capital that we’ve invested in Fenway to date for more opportunities,” said RedBird founder and managing partner Gerry Cardinale in an interview with the Boston Globe earlier this year.

“I hope and I think we’re going to have that opportunity to do so. That’s what buying into that platform should be all about.”