Venky’s Group of Hatcheries to buy 100% of English Premier Football League Club,Blackburn Rovers for Pounds 46 Million => Rs 325 crs…That’s literally Chicken Feed for them !…it now becomes the first big Indian fan of this Club by default and virtue of owning it !
Venky’s Share Price dropped 9% today from Rs 900 + levels to Rs 832 close……why?…..perhaps the market is skeptical that the Group’s just announced Investment of £ 46 Million or Rs 325 crs for the Price that the Pune based Rao Family owned Venky’s Hatchery Group will pay to pick up 100% of English Premier League Football Club,Blackburn Rovers…this will be applied to pay £ 25 m to the current owners,Walker Family Trust,£ 15 m to cover the club’s debt obligations and £ 6 m for an Investment Pool to strengthen the Team by buying/leasing new players….will come out from the Listed Company’s balance sheet…..highly unlikely…it should be through another group overseas company keeping in mind existing investment,cash flow,legal,domicile and tax stipulations,compliances and efficiencies
Just ten days ago another top English Club,Liverpool Football Club, was taken over by the American Group, New England Sports Ventures for £ 300 Million….so Venky’s Group are getting Blackburn relatively much cheaper…but then Blackburn always finishes mid table or at bottom of the table,except for that historic 1995 League Title win,while Liverpool have won the Premier League several times and start of as one of the Cup Contenders every single year…..India has growing legions of young Fans of top English Clubs like Manchester United,Chelsea,Liverpool,Arsenal…even Manchester City…but none for Blackburn Rovers…so in a sense Venky’s Group will become the first big Indian Fan of Blackburn Rovers by default and virtue of it becoming their Owner !
However put in perspective,this takeover of Blackburn Rovers is literally Chicken Feed for the Venky’s Group….Clearly the Purchase of Blackburn Rovers has cost the Venky’s Group merely a month and half of Group Sales and less than a Year of Group Profits!….have a look at the Financials below….In fact media reports suggest the Group Sales and Profits last year were a Billion Pounds and 118 Million Pounds respectively….that’s Sales of over 7000 crs and Profits of over Rs 800 crs !…I’ve been conservative in my estimates as i reckon the media is talking EBIDTA and I’m talking PAT
The Group’s listed Company is Venky’s…it was traded at Rs 910 + this morning but closed 9% lower at Rs 832…these are some of it’s financials as at March 31,2010