AEG Auction Underway; Sale Price Could Exceed $10B

AEG Chair Philip Anschutz has “kicked off the auction” of the planned sale of the company, with an “expectation that the sports and entertainment giant should draw bids in the $10 billion range, higher than previously believed,” according to sources cited by Damouni & Bansal of REUTERS. Sources said that the "initial, 25-page AEG information memorandum that describes the business but has no financial information was expected to go to ‘dozens’ of potential buyers” yesterday. The sources added that the initial group of recipients “is expected to include rich individuals, rivals, sovereign wealth funds, real estate firms, and private equity firms.” The sources said that Anschutz is “likely to start signing non-disclosure agreements and send out the books with financial details by the end of the month.” The sources added that Anschutz “wants to keep the AEG platform in one piece because he believes the company's holdings are more valuable as a group than in individual pieces.” The price expectations and Anschutz' “insistence on keeping the platform and the management team in place, however, adds complexity to an eventual sale.” The confidentiality agreement with potential buyers is “expected to have a provision that will prevent parties from discussing joint bids.” The sources said that later on in the auction, possibly “around the second round, the advisers also plan to launch a parallel process to seek approvals from the various sports leagues for the bidders” (REUTERS, 10/9).