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Prokhorov hires powerhouse investment banker to sell minority stake in Nets

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Marks, Prokhorov Razumov

Mikhail Prokhorov has hired powerhouse investment banker Allen & Co. to sell part of the Nets.

In a statement released Tuesday afternoon, Prokhorov, who is in New York this week, stated...

“I am beginning the search for a strategic minority ownership partner of the Brooklyn Nets. I have retained Steve Greenberg, Managing Director of Allen & Company, to assist me in this process. As I’ve said, I’m passionate about owning the Nets and our emerging sports and entertainment businesses, and will continue to look at growth opportunities. My goal in seeking a local minority partner is to further strengthen the team’s New York presence in order to expand upon our business and community relationships. I’m proud of the steps we’ve taken this year, including the opening of the world-class HSS Training Center and developing a new culture with GM Sean Marks and Head Coach Kenny Atkinson. I’m committed to the Nets and will remain the majority owner of the team.”

According to a Nets insider, the Russian oligarch would like to sell up to 49 percent of the Nets, but NOT the other assets held by Brooklyn Sports & Entertainment: Barclays Center, Nassau Coliseum, and the Brooklyn Paramount Theater.

There’s no indication that Prokhorov has set any deadline for a sale or who might be interested.

As NetsDaily reported Tuesday morning, Brooklyn Sports & Entertainment is in a buying mode, ready to announce “acquisition opportunities” soon.

We noted that while there was some suggestion last year that he could sell the Nets, there’s no indication now that Prokhorov is interested in selling anything more than a minority stake. Among those rumored to be interested in acquiring all or part of the Nets last year were Guggenheim Partners, owners of the Los Angeles Dodgers; Lorraine Jobs, widow of Apple’s Steve Jobs, Steve Cohen, the former hedge fund operator; and two foreign investors: Foshun, a Chinese conglomerate, and QSI, Qatari Sports Investments, owned by the Emirate of Qatar.

How much could a 49 percent stake fetch? Bloomberg estimated that the team is worth $875 million, meaning a 49 percent stake could bring Prokhorov more than $400 million. Five years ago, he paid $223 million (and assumed $160 million in team debt) for 80 percent of the Nets and 55 percent of Barclays Center. Barclays, Bloomberg estimated has a value of $825 million.

One question for potential investors is whether Prokhorov would grant minority owners the right of first refusal if he chooses to sell the majority stake and/or agree to a full purchase at a later date.

Allen and Co. is one of the nation’s top investment bankers. Although Prokhorov has said his goal is to find a “local” investor, Allen and Co. has a broad international business. This is the second time the Nets have hired an investment banker in an attempt to sell part of the team. Two years ago, they hired Evercore, a smaller, more sports and media oriented operation.

In recent months, Russian news organizations and Bloomberg have reported that Prokhorov is selling out of his Russian assets, mainly in commodities, and buying into U.S. sports and entertainment properties. Bloomberg estimates that Prokhorov now has more of his net worth located in the U.S. than in Russia. He is also estimated to have more than $5 billion in cash.