The sale of sports rights advisory group Sportfive by Advent International has been delayed by interference from one of its key customers. The French Football Federation has said that it would not back the company’s purchase by a private equity company.
Sportfive, whose main businesses are based in France and Germany, is currently owned by Advent, Goldman Sachs and German media group RTL as well as management.
In late July these shareholders initiated an auction process to attract bids worth as much as €1bn. This has brought a number of contenders including Permira, Cinven, Apax Partners and Butler Capital Partners, according to reports in the French press.
Trade buyers are also thought to be interested. Names mooted are leading UK advertising group WPP, US rival sports marketing company IMG, France’s Lagardere and Japan’s Dentsu.
However, Noel le Graet, president of the French Football Federation, has made it clear that he would prefer one of the latter companies to win the process. He has threatened to cancel the €60m contract it has with Sportfive to market its activities.
This latest upset in the auction may explain why Sportfive has changed the financing attached to the possible sale.
Originally Morgan Stanley was mandated to arrange a €750 funding package but this was considered too aggressive by the market. Now Dresdner Kleinwort has replaced the US bank and is expected to launch the recapitalisation within the next two weeks.
This would suggest a financial buyer still has the best prospect of picking up Sportfive. Advent International is leading the process as it currently has a 75% stake in the business, picked up for 560m in 2004.
Sportfive has the media rights to the Euro 2008 football championships. These are keenly sought after by bidders.
The French federation’s problems may stem from the fact that Sportfive currently holds the organisation’s marketing contract until 2010 on highly favourable terms.