Kieran Maguire pinpoints 'big problem' for Fosun as Peak6 deal opens door for £482m Wolves takeover

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Fosun are seeking minority investment in Wolves – or are they? The latest news from WV1 may indicate that the Chinese ownership group could be targeting a full takeover.

Fosun bought Wolves in 2016 during the height of China’s football boom, when the state was actively encouraging its biggest financial institutions to invest in the sport abroad.

But after promotion from the Championship, a European campaign, and an FA Cup semi-final, China’s directive with regards to investing in the Premier League appears to have changed.

It has long been reported that Wolves are seeking minority investment which Fosun say will provide a cash injection and help them achieve their strategic objectives.

But after another sale of high-profile player sales and the ensuing backlash forced Wolves chairman Jeff Shi to reemphasise that they were not in the market for a full takeover.

But the latest news from the world of football finance, that Fosun have bought back an eight per cent equity stake from minority investors Peak6, suggests the opposite.

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Premier League status is key: Peak6 deal values Wolves at £482m

As first reported by Bloomberg, Peak6 sold their stake in Wolves back to the now outright owners for £38.53m.

Extrapolated over the remaining equity at Molineux, that values the club at £482m.

But, as Liverpool University football finance lecturer Kieran Maguire told TBR Football, that valuation is heavily contingent on Wolves retaining their Premier League status.

Gary O’Neil’s side are without a win in their opening 10 matches this season and already need to make up a four-point gap if they are to climb out of the bottom three.

“If it values the club at £485m, if I was Peak6, I would snap their hands off given where Wolves are in the Premier League table,” says Maguire.

“The benchmark in the Premier League has risen in the past two or three years. At £305m, Newcastle are very much looking like an outlier. It is a completely different market now.

“The problem with Wolves is are they going to be a Premier League club in 6-8 months time? If not, are they worth £482m in the Championship? No, they aren’t.”

• READ MORE:Fosun chief shares what he's hearing from investors as Wolves target part-takeover

Are Wolves and Fosun gearing up for a full takeover

The party line remains that Fosun are committed to Wolves for the long term.

Their search for investment, they say, is with a view to getting £75m for an equity stake in Wolves in order to reinvest in their esports and sportswear brands.

But in taking full control of Wolves once again, Maguire thinks Fosun might be clearing the decks for a full takeover.

“The other consideration is that Fosun might want to present Wolves to an owners as a full takeover opportunity.

“Buying out a minority shareholder with a view to selling 100 per cent is a bit like me trying to sell my house but I have a tenant living in it.

“Get rid of the tenant, pay them to leave, then you can sell the whole thing as a complete package.”

How much are Wolves really worth and when could Fosun sell up?

The Premier League takeover or part-takeover market is highly saturated at present.

West Ham, Brentford, Tottenham and Crystal Palace are all seeking minority investment, while Everton are now off the market with Dan Friedkin’s impending takeover.

As far as Wolves are concerned, they will not be first cab off the rank, neither in terms of the potential timing of an investment or their appeal as a capital appreciation project.

Their precarious position in the league table around a quarter of the way through the seasons means that their enterprise value is highly volatile.

In the Championship, Fosun would have to dramatically slash their asking price.