John Textor caused apprehension in Botafogo fans when he said, in an interview with the French newspaper L’Equipe, who compromised his assets in obtaining the necessary financial guarantees to buy Lyon. Among these assets is Eagle Holding, the group that controls its other clubs: Crystal Palace, Molenbeek and the alvinegro club.
The American businessman made his first investments in football with his own capital. Now, to take control of Lyon, he needs third-party money to close the deal. The solution found was a kind of partnership with Cannae, an American group that invests in various companies, directed by Bill Foley.
John Textor will become Lyon’s majority shareholder (Photo: AFP)
Textor obtained from Cannae the commitment to lend 523 million euros, today equivalent to around R$ 2.8 billion. The general terms of this agreement are public, as the US company had to inform the US Securities and Exchange Commission. In a document dated June 20, Cannae explained the deal.
In principle, this is a credit operation. Foley lends the amount so that Textor can complete the purchase of the French club – a necessary procedure, since, from Lyon’s point of view, whoever is selling needs to obtain financial guarantees from the American businessman.
It is even possible that the amount will not be returned to Cannae in cash, but with a stake in the companies in question. In other words, Foley can accept a percentage of Eagle Holding – or any of the clubs that Textr owns – in exchange for the €523 million contributed. This hypothesis is written in Cannae’s letter to the US CVM, whose acronym in English is SEC.
– The Debt Commitment Letter was delivered after Cannae entered into a non-binding transaction with Mr. Textor, on the formation of Eagle Football and Cannae’s interest in its equity, including through the potential conversion of part or all of Eagle’s equity facility under the agreed terms.
As the purchase of Lyon has not yet been completed, so far none of this has happened. Cannae has signaled that it will open the line of credit, but the money has not yet been sent to Textor. This also indicates that the guarantees that the entrepreneur offered were not formalized.
Once the operation is executed, is it possible that at some point something goes wrong and forces Cannae to execute the guarantees, including Eagle and Botafogo? Theoretically, yes, but this hypothesis is unlikely for now. Textor treats the credit line as temporary, necessary to present the financial guarantees to Lyon, which will soon be resolved, before becoming a de facto debt to Eagle.
Negotiations are still in progress, and the businessman’s representatives have tried to reconcile transparency with secrecy on certain points. That is why the matter is treated in a hypothetical manner. The final partnership agreement tends to be more complex.
This is yet another development of the new business environment that Brazilian football has entered. The SAF that manages Botafogo’s football is an asset. The company had 90% of its capital sold to John Textor, who will be able to do any business with them, as long as he complies with the terms of the agreement made with the Botafogo civil association in the purchase.