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Last Updated: Tuesday, 18 September 2007, 18:17 GMT 19:17 UK
Usmanov ups the ante at Arsenal
By Simon Austin

Alisher Usmanov
Usmanov bought more than 40m of shares and paintings on Monday alone
Any lingering doubts about Alisher Usmanov's intentions at Arsenal have been shattered by his share-buying spree this week.

The Russian billionaire, who bought David Dein's 14.6% shareholding in April, purchased stock worth almost 40m on Monday and Tuesday to become Arsenal's second-biggest shareholder.

But it was the price he paid for each share that was most revealing.

At 1700 BST on Monday, the 54-year-old paid 20m for a block of 1,953 shares.

That works out at 10,250 each, far in excess of their market valuation of 8,350.

And investment expert Justin Urquhart-Stewart says that means only one thing - that Usmanov is intent on taking over the club.

I suspect Usmanov will buy more shares and get up to 25%. This would mean the board at the AGM cannot push through proposals

Mihir Bose
BBC sports editor

"This latest move shows he is price insensitive and wants to take control of the business," the co-founder of Seven Investment Management told BBC Sport.

"Arsenal shares are astonishingly illiquid, which means there aren't many of them around and you can't trade them easily.

"This chance to buy up a large block of shares was too good an opportunity for Usmanov to pass up and it seems he was willing to pay almost any price for them."

The price Usmanov paid for the shares means Arsenal's equity value alone is 600m and their enterprise value, which takes into account their debt, is 900m, according to the BBC's sports editor, Mihir Bose.

This is more than the Glazers paid for Manchester United.

Sources close to the 54-year-old Russian admit he is eager to increase his shareholding even more, although they recognise this will be difficult.

The Arsenal board owns 45.45% of the club's shares and have agreed not to sell any before next April.

Furthermore, majority shareholder Danny Fiszman, with 24.11%, and Nina Bracewell-Smith, with 15.9%, insist they have no intention of selling after that.

The price Usmanov paid on Monday is likely to make the eyes of even the smallest shareholder water though.

606: DEBATE

Bose says: "Indeed it might even make Lady Bracewell-Smith wonder. Four years ago her stake was worth 15m. Now it is worth 100m.

"Of course Lady Nina, like the rest of the board, is bound to an agreement they made in April that they will not sell for a year.

"Usmanov may be thinking that in offering such riches he can induce a change of mind. For him, a change of mind on the board's part is quite crucial."

American sports magnate Stan Kroenke, who bought 12.2% in April, could now become a pivotal figure in the future of the club.

Bose says the Arsenal board are confident that Kroenke will not sell to Usmanov.

"Keith Edelman (the Arsenal chief executive) has told me 'I do not see what the buying of shares does. It does not change anything'.

"The board's confidence is all the greater because I understand they spoke to Kroenke soon after the latest Usmanov move emerged.

ARSENAL MAJOR SHAREHOLDERS
Danny Fiszman: 24.11%
Alisher Usmanov: 21%
Nina Bracewell-Smith: 15.9%
Stan Kroenke: 12.2%

"Kroenke laughed off the thoughts of selling to the Russian-based businessman."

Bose believes Usmanov will now focus his attention on the smaller shareholders in the club.

The remaining 21.36% of the Arsenal shares are spread among approximately 1,200 minor shareholders.

"I suspect he will buy more shares from smaller shareholders and get up to 25%. This would mean the board at the AGM cannot push through proposals," added the BBC's sports editor.

If Usmanov reaches a 30% shareholding, he will have to disclose whether he intends to make a bid for the club.

The next step would be to gain a 50% stake, which would give him overall voting control at the club. A 75% stake would mean he could de-list the company from the stock exchange, while 90% stake would enable him to force a buyout.

There are no plans to offer Usmanov a place on the Arsenal board at the moment, according to Bose.



SEE ALSO
Usmanov increases Arsenal stake
18 Sep 07 |  Arsenal
Arsenal not for sale - Hill-Wood
10 Sep 07 |  Arsenal
Wenger signs new deal at Arsenal
07 Sep 07 |  Arsenal
Billionaire buys entire auction
17 Sep 07 |  Entertainment


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