April 13, 2018 / 6:40 AM / 8 months ago

Russia's Prokhorov sells 49 percent stake in Brooklyn Nets to Alibaba's Tsai

MOSCOW (Reuters) - Russian billionaire Mikhail Prokhorov has sold a 49-percent stake in the Brooklyn Nets basketball team to Joe Tsai, the executive vice chairman and co-founder of the Alibaba Group, the NBA team said in a statement.

FILE PHOTO: Brooklyn Nets owner Mikhail Prokhorov talks with the media about his decision to fire head coach Avery Johnson, at half time of their NBA basketball game with the Charlotte Bobcats in New York December 28, 2012. REUTERS/Ray Stubblebine

Prokhorov will continue to be the team’s controlling owner through Onexim Sports and Entertainment Holding, and the sale will not affect its day-to-day management or basketball operations, the statement added.

The deal, whose terms were not disclosed, gives Tsai the option to acquire additional shares in 2021, which would make him the controlling owner.

The Barclays Center, the team’s home arena, is not part of the deal and will continue to be wholly owned by Onexim Sports and Entertainment, the statement said.

Sources told Reuters last year that Tsai’s deal to purchase the 49-percent stake valued the team at around $2.3 billion.

The sale comes a week after Washington announced new sanctions against Russian businessmen, companies and government officials in response to what U.S. officials described as the Kremlin’s “malign activities” around the world.

Prokhorov’s Onexim Group has not replied to a request for comment about the timing of the deal.

Prokhorov, who was not targeted in the latest U.S. sanctions, sold a six-percent stake in Russian aluminum giant Rusal to billionaire Viktor Vekselberg and his partners earlier this year. Both Rusal and Vekselberg were added to the sanctions list last week.

Prokhorov has been gradually reducing his presence in the Russian business sphere since law enforcement officials searched offices of his Onexim Group two years ago, saying the searches were tied to a tax investigation at an unspecified firm or group.

At the time, two sources told Reuters they believed the searches were linked to Prokhorov’s RBC media holding, which had published revelations about people with ties to President Vladimir Putin. The Kremlin has denied this link.

Reporting by Denis Pinchuk, Gabrielle Tétrault-Farber and Polina Devitt in Moscow; Editing by Christian Lowe

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