This mornings big Arsenal news is a scoop from the Financial times the Alisher Usmanov is exploring the sale of his 30% Arsenal stake.
I imagine part of that exploration is inserting a story within the Financial Times to attempt to drum up some interest. A free advert. As I believe the story was planted by his side, I think we can say for certain that he is looking to sell.
But who would actually buy his 30.04% share holding in the club?
Usmanov owns 18,690 shares. The most recent shares have sold northwards of £30,000.
If we take into account that such a volume of shares hitting the market in one time will likely go for a reduced cost (and the fact my OCD makes me like round numbers), Usmanov’s share holding is worth in the region of £500,000,000.
That is a huge chunk of change that someone is going to have to find to buy him out.
And who would actually be interested in doing so? Usmanov’s shares get you zero influence.
As it stands, majority shareholder Stan Kroenke has no interest in buying any more shares. Where he to get Usmanov’s, he could then force through the purchase of any remaining shares and make the company private. But would he really be interested in spending another £500,000,000 on shares to gain full ownership of a club that he already has full operational ownership?
I can not see Kroenke forking out another £500,000,000.
Nigerian businessman Aliko Dangote has a long term interest in owning shares. He is reportedly worth $12.2 billion, but would what spending £500,000,000 on Arsenal shares get him?
He would unlikely get a seat on the board, and therefore would have no influence on the club. Another billionaire buying out Usmanov would simply be a vanity project. To say that they are Arsenal’s second biggest share holder.
They might see it as a foot in the door. To ensure that if Kroenke ever does sell, they are potentially first in line. But this would rely on Kroenke selling. A £500,000,000 investment to be first in line to something that probably will not happen in the near future? It is not worth the investment.
A financial institution might be interested in the share holding purely on an investment basis. But is Arsenal already overpriced at £30,000 a share?
it was only in 2017 that Arsenal shares smashed through the £20,000 barrier for the first time.
A year on, we are looking at shares being worth 50%, even though financials and outlook are no better.
The reason for this is a bit like the rise in Bitcoin.
Arsenal shares are so limited, and so few come on the market, that a seller can nearly name their price.
A football club is not like a normal company. Many of the recent buyers are not purchasing to make a profit, they are purchasing to say they own a share in Arsenal. If prices were still at £20,000, I would certainly be interested in purchasing one.
To a middle-aged trader, a lawyer, even a retiree in London, £30,000 is not much to part with to own a single share in the club, it is a vanity purchase.
Arsenal pays no dividend. It would not make sense for a financial institution to spend £500,000,000 on shares that they would almost have to sell off individually over a few years to see a profit on.
Not too many people in the world have £500,000,000 cash sitting waiting to be invested in something that will get them no influence and very little return.
Will anyone actually want to buy Alisher Usmanov’s shares?