The Chicago investment bank chief leading the group selected to buy the Chicago Cubs for $900 million is offering to sell stakes in the baseball team to private investors in order to raise money for the bid, according to Crain's Chicago Business.
Tom Ricketts, the Chicago-based chief executive of Incapital LLC and the son of the founder of TD Ameritrade Holding Corp, is trying to raise $100 million or more through the sale of preferred stock to investors in a move that would allow his family to raise less money on their end, Crain's reported on Monday.
Ricketts, who could not be reached to comment, is leading his family's bid for the team.
Ricketts is working on his bid's financing and is exploring bringing in outside investors at the same time, said a source familiar with the bid who asked not to be identified. There is no impact on the sale, the source said.
"He is offering that as a cheaper alternative to some of the commercial financing he already has arranged," said the source, who was not authorized to speak on the matter.
Under Ricketts' plan, the preferred shares would represent a stake in the team and entitle the investors to a 6.5 percent dividend, but no voting privileges or other rights of control, Crain's said, citing people familiar with the terms.
Investors also would receive front-row seats at Wrigley Field, the Cubs' home ballpark, the chance to mingle with players and a seat on an advisory board that would meet to discuss the team, Crain's said.
Ricketts is hoping to find five to 10 investors willing to put up $25 million each, Crain's said. By bringing in outside bidders, Ricketts would be able to reduce the amount of borrowing for his family's bid.
Officials with Tribune Co, which is selling the team, its storied home park of Wrigley Field and a 25 percent stake in a local sports TV network, have said they hope to have the deal done in May. However, the process could drag into June.
Tribune, which owns the Chicago Tribune and Los Angeles Times newspapers, filed for Chapter 11 bankruptcy protection in December due to its heavy debt load and the weak U.S. publishing sector. It put the Cubs on the block in April 2007, when Tribune agreed to an $8.2 billion buyout led by real estate magnate Sam Zell.
Ricketts and his family are eager to take control of the team, which has not won a World Series title since 1908 and is popular due to national exposure on cable TV and its reputation as "lovable losers."
In February, the Ricketts family raised more than $400 million through the sale of TD Ameritrade shares back to the online discount broker. As part of the Cubs sale, Tribune Co is expected to maintain a stake of at least 5 percent in the baseball club.
Major League Baseball's owners are expected to vote on the sale before it is submitted to the U.S. bankruptcy court in Delaware for final approval.
Bankruptcy lawyers have said the court's approval process could take another two to four weeks. While the Cubs are not part of the bankruptcy, the court must approve any deal.
The idea is for owners to vote on the Ricketts bid at their meeting in New York on May 20-21. The bid requires the approval of 75 percent of baseball's 30 team owners.
(Source: Reuters)
