According to a report by L’Équipe, RedBird Capital Partners are currently in the process of selling Toulouse FC, with Otro Capital said to be well-positioned to take over from their fellow American investment fund.
This follows an article in Bloomberg from November last year, where it was thought that RedBird were evaluating the viability of the sale of the French side.
However, RedBird who bought an 85% share in the French club in 2020 are now ‘on track’ to sell the club, according to L’Équipe who spoke to a source close to the deal, with their source going so far as to say that the sale was ‘90% done.’
Yet, until something official is released between the two investment funds, then these reports should be met with some caution. If a deal were to be taking place there are still a lot of factors that could prevent it from proceeding.
The creators of Otro Capital, Alec Scheiner, Niraj Shah, and Isaac Halyard, were all former directors of RedBird. The three were even members of the Toulouse board of directors until last summer when they resigned, L’Équipe alleges, due to an administrative overhaul following the club’s qualification to the Europa League.
UEFA has rules on multi-ownership and prohibits two clubs with common shareholders and directors from competing in the same European competition. This became a problem for the investment fund when Toulouse unexpectedly qualified for the Europa League by winning the Coupe de France.
Since RedBird also owns the Italian club, AC Milan, this meant that the investment firm would have two teams competing in the Europa League. Therefore, there necessitated some changes to Toulouse’s administration, to prevent the team from being denied their spot in the European competition.
It is alleged in L’Équipe’s report that RedBird would now like to fully concentrate on their Italian club, which could provide their former employees a route back into the French side.
If a deal were to take place between the two investment funds, then it is thought by the French paper that Otro Capital would not be able to purchase RedBird’s shares on their own, and they would likely seek outside investors to help facilitate a sale.
This was what the investment firm had previously done during their purchase of a 24% equity stake in Alpine Racing, a Formula 1 team based in Enstone in the United Kingdom. When investors, such as Rory McIlroy, Anthony Joshua, as well as Trent Alexander-Arnold (25) all invested through Otro Capital.
It is also thought that any deal that Otro Capital would make would be limited only to the shares that RedBird own, with the 15% minority share held by former club president, Oliver Sadran, unlikely to be sold. Sadran is reportedly keen to remain a minority owner of the club.
L’Équipe reports that they were unable to reach the current president of Toulouse, Damien Comolli, for comments on the story. However, the club has released a short statement addressing the news. ‘Toulouse categorically denies the information recently published in various media and on social networks claiming an official sale of the club. These rumours are completely unfounded and devoid of any truth.’