Chelsea minority investors Mark Walter and Todd Boehly are reportedly negotiating the sale of their stakes to Clearlake Capital after clashing over strategy for at least half of their time in charge of the club.
Background of the consortium
Those three parties, plus Hansjorg Wyss, founded BlueCo together and committed £2.5 billion, plus £1.75 billion in future investment, to take over from Roman Abramovich, whom the government forced out. Control is split equally between Boehly and Clearlake, despite the latter owning over 60 per cent of Chelsea, compared to the 12.8 per cent that each of the others have.
The former became their consortium's public face after taking over, being installed as chairman for five years - a role he is due to relinquish to Clearlake at the end of this season - and also serving as their interim sporting director for six months.
Negotiations and valuation
The Financial Times reports that negotiations are underway following years of intermittent talks between the two parties. Nevertheless, it remains unclear whether they will reach an agreement on this occasion despite these developments. Their reporting references sources familiar with the matter in their coverage. Chelsea have refused to comment after being contacted by Reach plc.
According to the publication, Boehly and Walter value Chelsea at in excess of £5 billion, with the pair jointly holding just over 25 per cent of the club. This breaks down to 12.8 per cent apiece, with Hansjorg Wyss holding the remaining 12.8 per cent. Based on the overall valuation, they would therefore be seeking in excess of £1.25 million for their respective shares.
Legal scrutiny and recent sale
Walter's investment empire is facing scrutiny from federal prosecutors in the United States and the Securities and Exchange Commission (SEC) over possible financial irregularities, according to Bloomberg. Those investigations are understood to concern two of his insurance firms and the global investment and advisory financial services company Guggenheim Partners.
The businessman has recently offloaded the Los Angeles Lakers basketball franchise for more than £9 billion. That transaction occurred barely 12 months after the acquisition of majority control last summer.
Potential motives and agreement clauses
The Telegraph cites a source outside Walter's office as stating: "Of course, there is speculation that Mark Walter would be open to selling his stake in Chelsea. Selling the Lakers would suggest that, for whatever reason, he is looking for liquidity, and Chelsea would be another way of doing that."
The consortium of Boehly, Clearlake, Walter and Wyss purchased Chelsea for £2.5 billion in 2022, along with a pledge to invest a further £1.75 billion. They would consequently be looking to at least double their original outlay, excluding the additional committed investment. Their initial agreement reportedly included clauses obligating Boehly and Walter to sell their stakes to either Clearlake or Wyss within the first decade of ownership, until 2032, if they want out.
