Chinese conglomerate Fosun International is attempting to sell a stake in Wolverhampton Wanderers as it gauges investor appetite for an eventual public listing of the club as part of a unit containing other sports-related assets that it owns.
The sale, which has been under way for months without attracting a buyer, is intended to determine how such a float would be received, according to people familiar with the company’s plans.
“It’s more to test the market, to see the value of Wolves,” said club chairman Jeff Shi, confirming that Fosun is exploring a stake sale. Wolverhampton, he added, was also looking for an investor to help promote the team outside of China: “It’s more about getting the right partner with strategic connections.”
The club is selling a stake valued at £50m-100m, according to a person with direct knowledge of the matter. The stake would reportedly represent 20 per cent of its equity, valuing Wolves at around £350m. Fosun paid £45m for the storied West Midlands club in 2016.
Hong Kong-listed Fosun faces an as-yet undisclosed writedown of its investment in British travel group Thomas Cook, which entered liquidation in September. Mr Shi denied that the stake sale was due to a shortage of funds at Fosun.
Wolves finished seventh in England’s Premier League last season, its best placing for nearly 40 years. Meanwhile, broadcast rights payments helped the club make a “handsome” profit of roughly £20m last season, Mr Shi said, reversing annual losses of up to £57m after Fosun bought the club, then playing in England’s second-tier league.
The club, which hopes the turnround in fortunes will tempt investors, declined to say who had shown an interest. “We are not just trying to sell the shares to anybody, we are very picky. We are doing it slowly,” said Mr Shi.
Fosun said that it was still in the early stages of deciding whether a public listing of Wolves alongside other sports assets would be tenable. Fosun is reported to have a stake in Gestifute, an influential Portuguese sports agency that has been used by Wolves to make key signings.
Several other Premier League clubs such as Newcastle United and Crystal Palace have in recent years failed to sell stakes, however. “Getting someone to buy a minority stake [in a football club] is incredibly difficult. Investors want full control,” said one financier.
Wolverhampton has been the best performing of several high-profile English teams which were acquired by Chinese investors in recent years, including Southampton, Aston Villa and West Bromwich Albion.
But Mr Shi said that the company was likely to reduce its direct investment in the team, which it has provided with interest-free loans worth at least £75m in recent years.
“When we won the championship Wolves was not strong enough to be independent and we could only depend on our parent group,” he said. “But now we are much stronger. Now is not the time to always get funding from Fosun.”
Additional reporting by Murad Ahmed and Arash Massoudi in London
