Nets owner withheld financial info to stall stake sale

Nets owner withheld financial info to stall stake sale

This may be what Russian collusion looks like.

Brooklyn Nets owner Mikhail Prokhorov saw his stake in the team rise in value by 270 percent in just three years. His stake in 2015 appears to have been bought at an artificially low price.

Forest City Enterprises in 2015 attempted to sell its 20 percent stake in the Brooklyn Nets, and the team’s controlling owner Prokhorov did not make it easy for it to find an outside buyer.

He withheld financial information from prospective buyers, sources with direct knowledge of the deal said at the time.

Forest City needed to sell so it could pull off a complicated conversion to a tax-advantaged real estate investment trust, which would then help boost its share price.

Prokhorov in December 2015 bought the 20 percent of the team he did not own from a desperate Forest City at a $875 million team valuation.

This week, Prokhorov’s Onexim Sports & Entertainment announced it had completed a deal with Alibaba tycoon Joseph Tsai to sell 49 percent of the Nets at a $2.35 billion valuation, giving Tsai the right to buy a controlling stake in 2021. That valuation shows a 270 percent increase over the three years.

“We categorically deny doing anything to thwart Forest City, which was a wonderful partner for many years, or withholding any financial information from potential partners during negotiations,” an Onexim spokewoman told our Josh Kosman.

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