Westfield, the Australian-based shopping center giant (with a huge U.S. presence), Steve Mnuchin, chief executive of Pasadena-based One West Bank, and Qatari Sports Investment, a fund linked to the Qatari royal family, are all taking a look at Philip Anschutz's sports and entertainment empire, reports the Financial Times. The list of potential bidders also includes Guggenheim Partners, the investment firm that bought the Dodgers last year, Colony Capital, the L.A. real estate firm, and billionaires Patrick Soon-Shiong and Larry Ellison. The expectation is that these and possibly other players will form investment groups in which to submit bids as early as next week. The FT says that those bids will be in the $5 billion to $8 billion range, below the $10 billion that Anschutz supposedly had been looking for.
AEG's size and mix of assets initially led to uncertainty about how many bidders could afford a $10bn offer. Two people close to potential bidders said their valuations were in a $5bn-$8bn range. AEG's annual earnings before interest, tax, depreciation and amortisation are about $300m, they said, which alone might support debt of about $2.5bn-$3bn. However, Mr Anschutz and his advisers at Blackstone are said to have steered bidders to look more widely at AEG's cash flow, hard assets, trophy properties and development potential when valuing the company. These factors could support a premium price and $5bn-$6bn of debt, some people in the process said.
Meanwhile, a story in Billboard has its sources conflicted on the status of the bidding. This is what often happens when you have many parties involved in a big sale. People claim to know what's going on when in fact they don't. You might recall that AEG CEO Tim Leiweke recently said that a deal could be completed in the first quarter, and if the FT story is correct, that would still be do-able. Finding a buyer would help clarify AEG's continued interest in bankrolling an NFL stadium - and perhaps franchise - in downtown L.A. From Billboard:
Leiweke did not seem concerned about the long-term future of the company no matter what shape AEG takes under new ownership. "I...understand I serve at the will and mercy of the new owners; some may want me as part of the management team, some may not, [and] I'm okay either way," he says. "The good news is we tied up all of our key management long term. Everyone is very committed here. I'm very committed to them, they're committed to me, we all have an enthusiasm for this business."