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PARIS, Jan 11 (Reuters) - Property investment company Colony Capital has become the top shareholder in soccer club Paris Saint-Germain, the former French champions who have fallen on hard times but still have attractive real estate assets.
On Friday, Colony Capital said it would acquire a roughly 30 percent stake in Paris Saint-Germain (PSG) from private equity firm Butler Capital.
Following the deal, Colony Capital will hold around 62.5 percent of PSG’s capital. Butler Capital will hold around 5 percent of the soccer club. The companies did not disclose financial terms of the transaction.
U.S. investment bank Morgan Stanley MS.N also holds a stake of around 33 percent in PSG, one of France's most popular teams, which is currently sitting a little above the relegation zone in the country's top league after a series of poor results.
The club has had sporadic problems with hooliganism in recent years and is also losing money, in stark contrast to some of Europe’s leading clubs such as Manchester United, which reported this week that its annual pretax profit had doubled.
The situation is a far cry from the early 1990s, when PSG won the French championship, regularly competed in Europe’s most prestigious tournaments and boasted players such as French international David Ginola and Brazilian star Rai.
Relegation would have dire financial consequences for the club. However, an attractive aspect of the club for financial backers is that it plays matches at the Parc des Princes, one of the capital’s top sporting arenas.
In an interview with Le Parisien newspaper, Butler Capital head Walter Butler said he was not “completely satisfied” with some of the policies at Paris Saint-Germain and said the club could do better in bringing up young, talented players and then selling them on for a profit.
Colony Capital said it would still push hard for improvement at Paris Saint-Germain.
“We want to continue our rebuilding work so that Paris Saint-Germain can quickly get back to the level it deserves,” Colony Capital Europe Chairman Sebastien Bazin said in a statement.
A spokeswoman for Colony Capital said the club would continue with its plans to find ways to boost revenue from its property assets.
“There’s a match at the Parc des Princes once a fortnight. They’re thinking of ways to use the facilities better and make local residents want to go there more often, instead of local residents regarding the place as a nuisance,” she said.
The Parc des Princes technically belongs to the Paris city authority, but Paris Saint-Germain has a concession at the ground that runs until 2014.
The club, founded in 1970, usually attracts between 35,000 and 40,000 spectators for home matches -- well below attendances of between 70,000 and 80,000 at Manchester United, Real Madrid or Barcelona.
PSG was bought by pay-TV group Canal Plus during the 1990s and then sold to the current shareholders in 2006. (Editing by Will Waterman)
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