Mike Ashley And Frasers Group Secures Purchase Of The CBS Arena
Mike Ashley's Frasers Group had been named as the preferred bidder after making a £17m bid for the businesses, which had been placed into administration. Coventry City Football Club had agreed a deal on Wednesday to sell an 85% stake in the club to businessman Doug King but a court ruled his £25m offer to own the stadium had come too late. The judge ruling there was “not enough substance” in King's bid to delay making the administration orders and had been told the Frasers Group would pull out if there was further delay. Speaking prior to the hearing, King told the BBC his offer to buy the club, which is subject to English Football League approval, would go forward whatever the court's decision regarding ownership of the CBS Arena.
Joint Administrator Andrew Sheridan said: “This is a pleasing outcome, which helps secure up to 1,000 jobs in Coventry and ensures that the venue will continue to play a major role in the city’s economy as a world-class entertainment and hospitality venue and home for Coventry City Football Club. By agreeing to sign an exclusivity agreement before the 1st November, Frasers Group was the only interested party that was able to meet the terms of the sale process. This was essential in providing the necessary funding that enabled the Arena to continue trading beyond that date. Without this, and the collaborative and supportive approach taken by all key stakeholders throughout the process as well as the tireless efforts of the core management team, the Arena would have been forced to close on 2nd November resulting in hundreds of job losses and a materially worse outcome for creditors. We wish Frasers Group and all involved in the Arena every success for the future.”
On Wednesday, Arena advisors FRP disclosed that only an advance payment from Frasers had saved the stadium from closure. “Having conducted an accelerated sales process, the ACL board entered into an exclusivity agreement with a preferred bidder on 1st November, which, crucially included the payment of a non-refundable deposit to provide the necessary funding for the arena to continue to trade,” FRP said in a statement. “This was essential as the businesses are insolvent and had run out of cash. No other interested parties were willing to provide the required level of funding as set out in the bidding process, in the necessary timescales.”
The court heard that Arena Coventry Ltd (ACL), Arena Coventry (2006) Ltd and IEC Experience Ltd had only £1,201 in their bank accounts, with an energy bill for £2,000 due for payment on Friday. Lawyers also told the court the companies would need £300,000 to continue trading beyond Friday and £645,000 to do so to the end of the month.
A spokesperson for the Coventry Building Society Arena said “We are delighted that Frasers Group have acquired the arena. This will see the doors of this flagship venue remain open and continue to play a strategic part in the City of Coventry’s economic tourism plan. It is a great result for everyone who uses the venue for business, sport, and music as we now can continue with what we do best and that’s providing hospitality at is best. We would like to thank all of our staff, suppliers and tenants who have worked so hard to ensure that it has been ‘business as normal’ during the past weeks. Our thanks also go to our key stakeholders, Coventry City Football Club, Delaware North UK, Coventry City Council and Coventry Building Society, for their ongoing support and collaboration.”
A Frasers Group spokesperson said: “Through the acquisition, we are pleased to have been able to secure a long-term future for the Arena, protecting jobs and supporting the local community. In particular, we are looking forward to working with Coventry City Football Club. This investment demonstrates Frasers Group's belief in the West Midlands as a key economic region and will create many mutual synergies that are aligned with the business' elevation strategy and the Group's potential development plans in the wider area. Frasers Group will continue to engage with local stakeholders at the site to ensure stability and continuity.”
