Officials at the London Stock Exchange are probing a sharp rise in the share price of the owner of the Chelsea Football Club ahead of its announced takeover, sources said this evening.
The price of shares in Chelsea Village, a holding company for a range of leisure businesses centred around the Chelsea Football Club, surged from 14 pence in April to 30 pence by the end of June. The company announced today that it had agreed to a takeover offer of 35 pence per share by Russian businessman Roman Abramovich.
The share price movement has raised eyebrows at the LSE, which may refer the case to the financial watchdog, the Financial Services Authority, sources said. Neither organisation was prepared to comment on a specific case.
A spokesman for the LSE said: 'We do not comment on specific cases but we look at the circumstances around any share price movement and if we saw cause for concern we would refer it to the relevant authority, which in the case of market abuse would be the FSA.'
News of the takeover sent shares in Chelsea Village soaring by over 40% in London in early trading, before closing up 25% on the day at 35 pence.
Russian businessman Roman Abramovich agreed with Chelsea chairman Ken Bates last night to buy more than half the shares of Chelsea Village - the company which owns the London club.
Under the cash offer, the 36-year-old Abramovich, through his English offer vehicle Chelsea Ltd, has already agreed to purchase 84.9 million Chelsea Village shares at 35p each, just over half of its entire issued share capital.
'We are delighted to agree this deal to acquire what is already one of the top clubs in Europe,' Abramovich said in a statement.
Abramovich, a major shareholder in Russian oil company Sibneft, has a law degree from the Moscow State Law Academy and was elected to the lower house of the Russian parliament in 1999, according to the offer document.
Losses at Chelsea almost trebled in the first six months of the financial year to the end of December 2002 due to high player costs and a 'moribund' transfer market.
Chelsea finished fourth in the premier league last season to qualify for the Champions League.
