News from US could impact Tottenham takeover as £2.6bn deal now possible

The latest financial developments in the United States may have a significant impact on future investment in Tottenham.

In the preamble to Tottenham Hotspur’s accounts for the 2022-23 season, chairman and co-owner Daniel Levy indicated that he is searching for new investment.

Four distinct parties have been associated with a complete or partial buyout, although Spurs have not specified the level of investment they are seeking.

MSP Sports Capital, a US private equity firm, is among these investors.

Their enthusiasm in a full acquisition appears to have lessened, but the private equity sector’s overall interest in Premier League clubs remains strong.

However, market forces stateside might mean that a takeover from a US private equity source is now less likely.

Rising interest rates could shrink Spurs investment pool

Private equity firms frequently borrow from commercial lenders to fund purchases, such as 777 Partner’s unsuccessful takeover of Everton.

In the United States, where interest rates are determined by the Federal Reserve, private equity activity slows when borrowing costs rise.

According to the Financial Times, Fed official Michelle Bowman predicts that interest rates may need to be raised soon.

This would exacerbate challenges with debt financing for private equity groups, perhaps reducing the pool of investors capable of orchestrating a Tottenham acquisition.

And, while some corporations would be able to finance a Spurs takeover even with increased borrowing rates, the cumulative effect of a smaller pool would diminish the club’s enterprise value.

That may make Levy and company less likely to sell.

ENIC is not in a hurry to sell any equity and will wait for the best opportunity to maximise returns.

Spurs valued at £2.6bn

Spurs are estimated to be valued approximately £2.6 billion based on several analytical methodologies.

This value has been boosted by significant investments in the stadium and other facilities, including a massive new on-site hotel.

The club’s operating income and EBITDA (profits before interest, tax, depreciation, and amortisation) are good, making it a major factor in evaluating its performance.

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