LA Billionaire, Guggenheim Plot Bid for Entertainment Firm AEG

Monday, 24 Sep 2012 01:47 PM

 

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Los Angeles billionaire Patrick Soon-Shiong is putting together an investor group to make a bid for Anschutz Entertainment Group, the Los Angeles-based sports and real estate company, according to three sources with knowledge of the deal.

Soon-Shiong, whose fortune is estimated at more than $7.2 billion, has joined forces for the AEG bid with private equity firm Guggenheim Partners, which recently led a local group in the purchase of the Los Angeles Dodgers baseball club. Soon-Shiong and Guggenheim are expected to bring in additional partners, two of the sources said.

AEG's assets include the Los Angeles Kings pro hockey team, the Staples Center in Los Angeles and more than 120 sports or entertainment venues around the world.

Founded by Denver billionaire Phil Anschutz, AEG is close to breaking ground on a new $1.2 billion football stadium in downtown Los Angeles. The project is awaiting a commitment from a National Football League team to relocate to the facility.

Soon-Shiong, an avid sports fan who owns a small piece of the Los Angeles Lakers basketball team, is particularly interested in bringing a professional football team to Los Angeles, and aims to buy a team or encourage one to move so it can play in the new stadium, said one source.

AEG, which is operated by its president, Tim Leiweke, said on Sept. 18 that it was exploring a sale of the company and had retained Blackstone Advisory Partners. Blackstone is assembling a list of potential buyers and is expected to provide interested ones with financial information in the next few weeks, a person close to the bidding told Reuters last week.

A spokesman for Soon-Shiong and a spokeswoman for Guggenheim had no comment. AEG's spokesman said it does not comment on what he called "rumor and speculation."

Soon-Shiong, a surgeon and one-time professor at UCLA's Medical School, created and sold two pharmaceutical companies for a combined $8.6 billion. He is believed to be the wealthiest person in Los Angeles, according to Forbes Magazine.

This spring, Soon-Shiong and hedge fund billionaire Steven Cohen were among the unsuccessful bidders for the Dodgers.

Soon-Shiong is also a 5 percent owner of the Los Angeles Lakers basketball team, which required him to be approved by the National Basketball Association. The AEG buyer will need NBA approval as well because AEG also owns a small stake in the Lakers.

Soon-Shiong intends to put together a broad group of local investors in a similar fashion to the one Guggenheim assembled for the $2 billion purchase of the Dodgers in May, said one of the people familiar with his plans. That investor group included basketball great Earvin "Magic" Johnson.

The Los Angeles Times reported on Sept. 21 that Soon-Shiong attended the New York Giants-Carolina Panthers last week as a guest of Panthers owner Jerry Richardson. The Panthers owner is the former chairman of the NFL's stadium committee.

In a statement to the Times earlier in the week, a representative of Soon-Shiong wrote: "Dr. Patrick Soon-Shiong is keenly aware that AEG is in play. We have the utmost respect for Phil and Tim and what they have accomplished in entertainment and sports and in revitalizing the downtown community." "We clearly are interested in furthering this legacy for Los Angeles," the statement added.

AEG owns entertainment venues in 17 of the top 50 U.S. markets, according to its web site. It owns the Los Angeles Galaxy Major League Soccer team, possibly best-known for star David Beckham, and AEG Live, which promotes concerts and other live events.

Guggenheim has more than $160 billion in global assets under management, according to its web site.

Soon-Shiong, 60, has been increasingly active in civic causes. Born in South Africa to Chinese immigrant parents, he has made large donations to two Los Angeles-area hospitals, including one to reopen the problem-plagued Martin Luther King hospital in one of the city's poorest neighborhoods. His family foundation has pledged $1 billion to create a national healthcare information highway.

Last year, he founded NantWorks, a venture that aims to use ultra-low power semiconductor technology and super-computing to improve education, healthcare and other social services.

© 2014 Thomson/Reuters. All rights reserved.

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