AC Milan is the target of sale talks with Bahrain-based Investcorp

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  • Deal would be first Middle East investment in major Italian club
  • Current U.S. owner Elliott took over Milan in 2018
  • Sources say valuation of club around 1 billion euros

MANCHESTER, April 15 (Reuters) - Bahrain-domiciled asset manager Investcorp has entered into exclusive talks to purchase Serie A club AC Milan, sources said on Friday, in what would be the first takeover of a top Italian team by Middle East investors.

One source close to the talks told Reuters the deal to buy the seven-times European champions from current owner Elliott Management Corporation was near to completion.

A potential valuation for the club would be in the region of 1 billion euros ($1.08 billion) including debt, the sources said.

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Investcorp manages over $42 billion in assets with business lines including private equity, real estate, absolute return investments, infrastructure, credit management, and strategic capital.

Investcorp and Elliott, which took over Milan in 2018, would not comment when contacted by Reuters.

An AC Milan spokesperson said only that "AC Milan remains focused on improving its performance on the pitch and to develop the club."

A second source briefed with the matter confirmed talks between Elliott and Investcorp over a potential sale.

Milan have won Italy's top flight league title 18 times but not since 2011. The club has struggled to recreate the glory years enjoyed under the ownership of Silvio Berlusconi and his Fininvest group.

CHAMPIONS LEAGUE PEDIGREE

The club won Champions League titles in 2003 and 2007 after Berlusconi was able to bring in some of the biggest names globally such as Brazilian Kaka and Ukrainian striker Andriy Shevchenko.

Berlusconi sold the club to Chinese investor Li Yonghong in 2017 for 740 million euros, including debts, before Elliott later took control.

Milan are currently top of the table, two points clear of city rivals Inter Milan but having played a game more.

The club reported a loss of 96.4 million euros ($104.18 million) for the year ending June 30, compared with a record 194.6 million loss the previous year.

Elliott has never formally put the club up for sale but a source with knowledge of the situation said it had received interest from investors.

Elsewhere in Italy's Serie A, Inter Milan are owned by Chinese company Suning Holdings Group, while American company The Friedkin Group own AS Roma.

Fiorentina and Atalanta are also American-owned.

While not present in Italian football, Middle Eastern investors control several other top European clubs, with Qatari Sports Investments owning Paris St Germain and Manchester City held by the Abu Dhabi United Group.

Saudi Arabia's Public Investment Fund took a majority stake in Premier League club Newcastle United in October.

Investcorp Holdings is domiciled in the Kingdom of Bahrain as a Bahrain Shareholding Company but delisted from the Bahrain bourse last year.

The company, whose executive chairman is Mohammed Alardhi, has offices in New York, London, Switzerland, Riyadh, Bahrain, Abu Dhabi, Doha, Mumbai, Beijing and Singapore.

($1 = 0.9253 euros)

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Reporting by Simon Evans, additional reporting by Elvira Pollina; editing by John Stonestreet, Toby Davis and Andrew Cawthorne

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