Yahoo Finance Everton FC Rescue in Balance With 777 in $452 Million Loan Talks
(Bloomberg) -- Investment firm 777 Partners has held last-minute talks to help fund its takeover of the Premier League’s Everton FC, according to people familiar with the matter.
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Miami-based 777 held talks with private markets investor Blue Owl Capital Inc. about arranging a £360 million ($452 million) loan tied to the club’s new stadium, said the people, who asked to not be identified because the details aren’t public.
777’s months-long pursuit of the Liverpool-based club hinges on repaying a £158 million loan to a group of investors led by MSP Sports Capital, a rival sports investor. MSP’s loan is due to be paid on April 15. If the loan isn’t repaid, MSP could take ownership of Everton, according to the people.
A deal with Blue Owl would help 777 repay MSP, though the people cautioned that a deal with Blue Owl is currently unlikely and discussions could end without an agreement.
New York-based MSP was originally in talks to make a direct investment into Everton last year, but withdrew after opposition from Rights and Media Funding Limited, one of Everton’s existing lenders.
It is unclear whether MSP will enforce the conditions of the loan if it is not repaid. Earlier this week, 777 asked for more time to complete the takeover and pushed back the target date to the end of May.
Representatives for 777, Blue Owl, and Everton declined to comment. MSP did not respond to requests for comment.
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Everton has become heavily indebted after its current owner, Farhad Moshiri, ramped up borrowing to pay for high-profile players and build a state-of-the-art stadium in Liverpool’s Bramley Docks.
Since agreeing to take over Everton last Sept., 777 has been funding the club’s day-to-day financial needs, including keeping construction going at the new stadium. It has loaned Everton over $100 million to keep the club running, according to people familiar with the matter.
The Premier League said they were ‘minded to’ approve 777’s takeover last month, but added a number of conditions, including the investment firm’s ability to repay various loans.
Everton is struggling to avoid relegation to the second tier of English football where broadcast and other revenue is typically less than in the Premier League. A recent series of points deductions against the club because of breaches of financial fair play rules has increased the risk of the club being relegated.
While Blue Owl has become a giant in the world of private credit, it’s never made a loan against a sports stadium before, said one of the people. The firm, which manages about $165 billion in assets, specializes in direct-lending and real estate investments, as well as taking minority stakes in other fund managers. It was formed in 2021 from a merger between Owl Rock and Dyal Capital Partners.
777, whose portfolio of football clubs includes Hertha Berlin in Germany, Genoa in Italy and Vasco da Gama in Brazil, had aimed to close the purchase of Everton at the end of this week, said another person close to the matter.
Read More: Everton-777 Is a No-Win Game for Soccer Chiefs
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