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Prokhorov confirms interest in Nets

9/22/2009 - NBA New Jersey Nets

MOSCOW -- Russia's richest man, Mikhail Prokhorov, has made a takeover bid for the New Jersey Nets, the tycoon confirmed on his blog on Tuesday.

Prokhorov, a former nickel mining baron, boasts that if his move is
successful, it would be the first time a National Basketball
Association club would come under foreign control.

Prokhorov's proposals, sent to existing Nets shareholders over
the weekend, would see his Onexim group provide a loan to build
a substantial part of a new arena, according to a post on his
Web site.

Onexim would also receive a controlling stake of the NBA
team for a "symbolic" price, the post said. Sources close to the
billionaire have previously estimated the overall value of any
deal at $700 million.

"For our Onexim group the realization of this very lucrative
business project, whose participation was made possible by the
world crisis [never in history have foreigners owned an NBA
club], is another interesting sports development," Prokhorov
wrote.

Nets and NBA officials declined to comment, but the team
said last week that they have received interest from potential
investors in the team.

NBA rules do not bar overseas ownership, and transfer of
ownership requires background checks on a new owner as well as
approval by 75 percent of the league's 30 owners.

Russian oligarchs spent money on yachts, mansions and
sports clubs as their investments rose with soaring commodity
prices in recent years. In the highest-profile deal, Roman
Abramovich bought London soccer club Chelsea in 2003.

While many of his Russian peers sought state bailouts, the
44-year-old Prokhorov, a former banker and mining executive, is
flush with money after cashing out of assets in 2008 before the
global crisis caused commodity prices to crash.

A former chief executive of the world's largest nickel firm,
Norilsk Nickel, Prokhorov has an estimated fortune of $9.5
billion, according to the latest Russian edition of Forbes
magazine.

Developer Bruce Ratner owns the Nets, which Forbes magazine
in December ranked as the 26th most valuable of the 30 NBA
teams, with an estimated value of $295 million.

The club plans to move from New Jersey to a new arena in
Brooklyn.

In addition, Ratner's company, Forest City Ratner, proposes
constructing 16 office and apartment buildings, as well as
upgrading subway, utility and other infrastructures as part of a
larger project.

Legal disputes, financing problems and challenges from local
community groups have dogged the project for years. In June,
Ratner dropped architect Frank Gehry to cut costs, further
irking critics as Gehry's design was a key factor in winning
public support for the project in the first place.

Information from Reuters was used in this report.